IVCA Feature: Highlights of ‘Private Equity Policy Lunch: A Fireside Chat with the American Investment Council (AIC)’ September 9th, 2025
September 17, 2025
On September 9th at the Union League Club of Chicago, the IVCA and sponsor firm KPMG presented the “Private Equity Policy Lunch: A Fireside Chat with the American Investment Council (AIC),” moderated by Lee M. Mitchell, Managing Director/Partner at Thoma Bravo, and a board member of both the IVCA and the AIC.
Sitting on the panel at the chat was Will Dunham, President and CEO of the AIC and Lee Slater, Senior Vice President of Government Affairs at the AIC. The chat topics were a look back at the 2025 tax policy debates, the growing opposition and perception regarding the PE industry and how the industry can respond, as well as private capital and state level legislative trends in the current environment.
The American Investment Council (AIC) is an advocacy and resource organization established to develop and provide information about the private investment industry and its contributions to the long-term growth of the U.S. economy and retirement security of American workers. Member firms of the AIC consist of the country’s leading Private Equity and growth capital firms united by their successful partnerships with limited partners and American businesses.
IVCA Executive Director Christie Pruyn began the luncheon by introducing sponsor KPMG, a British-based multinational professional services firm, and also one of the “Big Four” accounting firms. The following are the highlights of the event … NOTE: remarks edited for space and clarity.
INTRODUCTION
Moderator Lee Mitchell began by introducing Will Dunham and Lee Slater of the AIC, and expanded on the topics …
Lee Mitchell: We associate politics within the frenzied atmosphere of today, and we tend either not to pay attention or think much about it … but as has been said before just because you do not take an interest in politics doesn’t mean that politics won’t take an interest in you.
The image of Private Equity got established in Washington, when no one was there to defend the interest of the industry and for opportunistic legislators who had a problem with Private Equity for any reason. The industry was a sitting duck. There was literally nobody there to defend the industry.
And finally we got smart and worked to establish the American Investment Council. The talent, like the two gentlemen on the panel, have made enormous progress in setting the record straight about Private Equity. And while they’ve made great progress, as you’re going to hear today, there’s still a lot more to be done.
ONE BIG BEAUTIFUL BILL ACT
Mitchell opened the discussion with Will Dunham regarding the recent tax bill …
Will Dunham: The first six months of the for the AIC was totally focused on the tax bill.
It consumed the White House, the Treasury Department and both chambers of Congress. Almost no legislation passed for the first six months while they were working on this big bill.
That feverish work came about because a lot of tax policy was set to expire at the end of this year, so it had to pass or a big cliff was coming and a big impetus to get this done was on the part of the White House because they had sort of put all their eggs in one basket on this ‘One’ Bill, as the name suggests.
And no Republican was willing to step out of line line and vote against the bill, so to advocate any policy in that environment was difficult, because no member was going to vote against a bill this big and with this much momentum over one policy. Donald Trump had consolidated his power in his second term, it’s a striking change for us, having observed the first Trump administration to the second.
Dunham: So another piece of the context as we’re looking at this bill. In February, President Trump put out some of his priorities. One was to eliminate carried interest, which is obviously … in the Private Equity and Venture Capital Industry … how a piece of those profits are taxed. To counter that proposal was one of our big fights.
We spent a lot of time educating Congress … there are a lot of new members since the last signature bill in 2017. There were only four members of the Ways and Means committee on the Republican side in 2025 who were there in 2017, and now there are 21 who were brand new. They were not there when the first signature bill was originally passed … they were in some ways a blank slate coming into this bill. So every time we sat down with a member of Congress, we would take a list of all the portfolio companies in their district.
We would point out that the companies in their districts were all backed by Private Equity and Venture Capital. We worked in tandem with the National Venture Capital Association on carried interest and ultimately it came out favorably. The House of Representatives did not include it in the bill when it went to the Senate.
Dunham: Republicans used the reconciliation process to write the bill, so in the Senate the Democrats get one chance in that process to amend the bill … called Vote-a-Rama. So Lee and I had to get to work talking to Democrats. Lee will speak to that component.
Lee Slater: In Vote-a-Rama, kind of all rules are off except for Democrats have the opportunity to offer as many amendments on any topic that they’d like. Since there are only 50 votes on each side in the Senate, there are opportunities to pass amendments with a few Republican votes … there is a lot more populism on both the, the left and the right side, which creates an opportunity on issues like this to actually generate support.
So the goal is to start targeting which members on the Democratic side might be most likely to offer it up and start to think creatively for maybe things that they would want to focus their time on that would be more popular across the party and maybe more popular across the outside kind of Democratic activism community.
It was about getting a couple of Democratic senators to go to leadership and come up with other amendments and avoid a vote at three or four in the morning.
Dunham: We were protecting the industry from a doubling of its tax rate.
Dunham: Also on the table was Section 899. which would have given the administration the power to raise taxes on banking clients and, and foreign LPs if their home country had what the Treasury Department determined was a discriminatory tax against us. If you live in a country with a DST and do business with a U.S .bank or an LP with a U.S. Private Equity or Venture Capital firm, you could have seen your tax rate go up by 10-20%.
We love to partner up and build coalitions. We were part of a coalition with banks and a lot of others on Section 899 … fortunately we were able to get that out of the bill … and were ultimately successful.
Dunham: Interest deductibility was a big issue for us. For all the tax nerds out there, in 2017 it went to 30% of EBITDA. Then we went down to 30% of EDIT two years ago, and we saved the DA, so we’re back to 30% of EBITDA for interest deductibility, and that’s now permanent. That was a big win in the house, and made permanent in the Senate.
That gives you a flavor of hat gives you a little flavor for our involvement in the One Big Beautiful Bill and it all shook out pretty well.
COUNTERING GENERAL PERCEPTION OF PRIVATE EQUITY
Moderator Lee Mitchell opened this topic with (click) a video of Senator Elizabeth Warren. In summary, it was indicting Private Equity for their handling of businesses including the Joanne Fabrics Store and the Red Lobster restaurants.
Lee Mitchell: This comes up over and over again and a lot of it comes from Washington, but a lot of it comes from a lot of other places. What can we do about it? … To kind of get this back in a box and bring some facts to the discussion. What are you doing, what can we all do to address this?
Will Dunham: It is important to know what people are saying about the industry and, bring a few facts to the debate. One of those facts we put out at AIC is a pension study every year, the top 10 public pensions, the top 10 states by Private Equity returns, and it just turns out that Massachusetts [Senator Warren’s state] is actually number four out of 50 states for Private Equity returns.
And what we worry about is the sort of horseshoe theory of politics where populism on the left infects populism on the right, and there’s sort of a me too following among Republican senators saying, well, if Elizabeth Warren is getting clicks and likes for that kind of argument, we’re going to start making that argument.
As an industry and within the AIC, we’ve got to go in and talk to these members and educate and advocate … to make sure that they know what we’re doing, both on the retirement side for their state and on the investment side for businesses and jobs and economic growth.
Dunham: We worry about some of the rhetoric and, and, and so we’re talking to these new members who have run and recently come to the Senate and the House … and with redistricting there are less and less swing seats … to make sure they understand what we do an aren’t seduced by the caricature that’s kind of being put forward on both the far right and the far left.
Lee Slater: There are still good members of Congress up there who want to think actually about what happens, when capital is invested, and how to make sure the rules are fair. The fact that even despite her ongoing outcry as it relates to Private Equity, going back to the one big beautiful bill act, there still wasn’t an amendment on the Democratic side targeting Private Equity.
HEALTHCARE AND PRIVATE EQUITY PERCEPTIONS
Lee Mitchell: The problem is actually worse in the healthcare space. Senator Chris Murphy [D] of Connecticut has said that the Private Equity firm uses a leverage buyout, which means that they put up a small amount of their own money. They borrow all the rest, immediately saddling the the business with debt. Next, they strip the hospital. They comb through the balance sheets to find as many cost cutting opportunities as possible.
They lay off workers and they don’t pay the vendors. And while they’re, while they’re stripping the hospital of assets and depriving the staff, Private Equity executives pay themselves and their investors in the form of a dividend and, and they demand that their companies borrow money to pay shareholders even when they’re struggling. That’s known as a dividend recapitalization.
This pushes the companies into bankruptcy. That’s a healthcare investment strategy today … these strategic bankruptcies enable the fund to avoid paying debts such as unpaid bills and pension liabilities.
Mitchell: There is a push to get Private Equity out of this space. The problem with that is – even for those of us who maybe don’t invest in hospitals or don’t invest in doctors’ practices – is that once Private Equity gets pushed out of one sector, what’s the next sector that it’s going to be pushed out of? All of us who invest in any sector with Private Equity or Venture Capital money, once this gets going, it can have a life of its own and go well beyond healthcare. So that’s what we’re concerned about.
What’s gonna happen in this space? What’s Congress and the AIC doing about that, if anything?
Will Dunham: Healthcare is a headline risk for the industry to be sure, and I think there is a very credulous press, happy to write about it. If you look at the data and you’re fair about it, Private Equity investments in healthcare lead to quality outcomes and more access. And the way, prices don’t go up. So we are getting that word out there that private equity investments into healthcare actually does a lot of the things that we all want out of the healthcare system.
Elizabeth Warren likes to relate stories about about Steward Health, she tells it over and over again, that Private Equity bought this hospital, bankrupted it, and got rich again. What she doesn’t mention is that Cerberus Capital, the Private Equity firm who owned Steward Health, hadn’t owned it for five years when it went bankrupt.
There is a lot wrong with the healthcare industry. Private Equity is a convenient boogeyman for those criticizing the system. What we want to do is work with data-driven terms, and that’s why we’re sort of focused on a lot of research in this space, and there is not going be federal legislation regulating this space.
Lee Slater: It is devastating for a community when a hospital goes out of business because it affects people and draws attention, and it sets it apart from some of the other issues like investment, manufacturing, housing, etc. They’re not necessarily the same, and at the federal level they have been unable to create additional transaction review hurdles, but the debates are there at the state level, especially in Massachusetts and Connecticut as a byproduct of the Steward bankruptcy
It all comes down to being able to get in front of lawmakers and, and kind of walk them through what they’re being sold by these national organizations. The jobs that are already there and trying to unpack what we actually do when we build a relationship with a physician practice. And I found that those conversations have been incredibly successful.
In Oregon, where there was a hard-charging push for change, we were able to get in with the health chair and majority leader there and just walk them through piece by piece how this change to their MSO [Management Services Organization, investment entities that manage healthcare systems] structure was just going to result in basically that only hospitals would own these physician practices, which wasn’t gonna be a good outcome either, but the bill passed.
Slater: Without fanfare, there was another bill passed we were involved in that adjusted technical corrections to the other bill, but made the changes necessary for Private Equity to operate in the state, a little more confined, but a more normalized way.
When we’re able to have the conversations and are able to bring in local portfolio companies that can help tell the story, it’s been a pretty positive outcome.
Lee Mitchell: In Illinois we’re generally not on the list of states or areas that have become hostile to Private Equity or to Venture capitaI, and I think one reason for that is the 25 years of the IVCA. There is no other state that has been that has an organization that’s been around for 25 years that’s been trying to look out for those industries.
And I would just encourage everyone who’s not involved to get involved. And I’d also encourage firms that aren’t AIC members to think about becoming AIC members. And, and I know a lot of people think that that’s just for large firms, but there are ways for smaller firms to join.
The more firms that are in any of these organizations, the better off it will be for everyone … And the small firms often have the best stories to tell because you deal at a level of business that’s smaller and people can relate to, better than the kind of things that we deal with in a multi-billion dollar company that people don’t relate to as well.
AUDIENCE QUESTIONS
QUESTION: The IRS has gone in many directions regarding enforcement, and the current Trump administration has made a show about pulling money from the IRS and taking it away. I find the people who are there now aren’t like they used to be, they’re without a skilled understanding of how big business and small business works, and I worry about that situation. Does the AIC we have a position on any of this and how we think about resources on the tax side?
Dunham: It’s not something we would would naturally lobby on, advocate or educate around. We saw this administration with DOGE make a lot of cuts. Well, now the people and areas that were cut have been restored since then, because of their important functions. The cuts were not smart and the targeting created more problems than the benefits created. Sanity is starting to take over again.
Congress really needs to assert itself through the appropriations process. That’s really the proper place to make targeted cuts or changes to agencies. It won’t get headlines, but we’re seeing some strong pushback from the legislators.
QUESTION: You mentioned the Tik Tok videos and how they are used to inform, especially the younger generations that use social media for information. How is the Private Equity industry using social media to inform Gen Zs and younger that the industry is not bad, counter to what we saw earlier?
Dunham: We don’t do a good enough job in that space. Our digital team is telling us shorter is better … a 15 second video is just right. But we need to do a better job countering the anti-Private Equity front, because once a meme is out there, putting it back in the bottle is almost impossible.
Private Equity in general are focused on being the best investors in the world, strong returns for their LPs, and economic growth and job creation for their portfolio companies. I’m just guessing that you don’t have a team on social media defending Private Equity.
For all the firms that are doing social media, there are dozens who don’t have any public relations specialists at all, because they don’t want to be in the news. But of course the news will come to you if you’re not willing to go to the news.
QUESTION: Lee, how are you feeling about the health of Chicago and Illinois as headquarters for Private Equity? Short term and long term.
Lee Mitchell: We’ve had a very steady population of Private Equity and Venture Capital in Illinois and particularly in Chicago. And there hasn’t been any reason or people to feel that this isn’t a good enough place for them to be, except occasionally when something is proposed at the state level that actually could make it not as a pleasant a place to be for those of us in the business.
This is the kind of thing that the IVCA gets itself involved in. We have Dave Strickland sitting here who is a contract lobbyist essentially for the IVCA and knows an awful lot of people in the state legislature, just like the AIC know an awful lot of people in the national legislature.
And we say to legislators, don’t do something that will cause us all to want to leave, because we do invest in Illinois businesses and pensions, and because it’s not hard to leave. We don’t have factories, we don’t have embedded costs. And could we move tomorrow? Yes. Most of us could just pack up and go someplace else. That has resonated with our Illinois legislators, fortunately, over the years.
Mitchell: But bottom line I think people like it here, that’s why we are here. And we may have opened offices all over the country, but in many cases this is where we were founded. This is what we call our headquarters. And that’s how we want it, and we wouldn’t change that unless there’s something that is aimed at us by a legislature that’s might be hostile, and the IVCA works hard to make sure that isn’t the case.
I’d urge everybody who isn’t involved get involved … Christie Pruyn [Executive Director of the IVCA] and Amy Selco [Senior VP of Membership Services of the AIC] are the contacts sitting here. They can tell you how to get more involved.
For more information about the AIC, click here.
The next IVCA Panel event – sponsored by Ropes & Gray – will be ‘Leveraging AI to Transform VC & PE Firms’ on October 7th, 2025 (11:30a-1:30p) at the Chicago Club, 81 East Van Buren Street, Chicago. For details and registration info, click here.