U.S. Markets open in 2 hrs 37 mins

Bonderman Backs Warren Over Trump Despite Private Equity Attacks

Amanda Gordon

(Bloomberg) -- Democratic presidential contender Elizabeth Warren’s attacks on private equity firms haven’t stopped one industry giant from supporting her.

David Bonderman, the billionaire co-founder of TPG Capital, said the existing slate of candidates would do better than Donald Trump, and said he would pick the Massachusetts senator over the president.

“If the choice is Trump against Warren, I think it’s a clear choice,” Bonderman said Saturday afternoon at the SummitLA19 conference in Los Angeles in response to a Bloomberg query.

Warren, who’s made health care and income equality, along with the implementation of a wealth tax some of her key campaign messages, has repeatedly taken aim at the private-equity industry. In a tweet last month, she said that these firms are “sucking value out of our companies,” blaming the industry for a loss of jobs.

‘She Can’t Count’

While Bonderman, 76, said Warren is smart, he doesn’t think she’d be able to push through many of her proposals. The problem with the candidate, he says, is “she can’t count.”

“I believe in capitalism,” said Bonderman, who has a net worth of $4.2 billion, according to the Bloomberg Billionaires Index. “Like with everything else, it gets overwhelmed. The tax policies are all wrong. The social policies are all wrong. It’s hard to do something about it.”

Warren also proposed earlier this year to link the profits at private equity firms to the success -- or failure -- of the companies they buy and sell, saying that these firms often act like “vampires” in their acquisitions by “bleeding the company dry and walking away enriched even as the company succumbs.”

The former Harvard law professor has risen in the polls -- a recent Quinnipiac University survey showed she has the backing of 20% of Iowa’s likely caucus-goers, more than any other Democratic presidential candidates. A week ago, she narrowed the gap with former Vice President Joe Biden in primary preferences for the Democratic presidential nomination in an ABC News/Washington Post poll.

Still, she’s recently faced heat from other candidates including Biden, who accused her of fabricating the math behind her health-care plan.

“And those of you who like Elizabeth Warren, I think you can take some solace in the fact that none of the things she proposes will ever get passed by a U.S. Congress, controlled by either party,” Bonderman said. “Having said all that, she’s an attractive candidate in many ways, and my brethren on Wall Street are not looking to a 2% wealth tax, but then it won’t happen anyway.”

Investors have committed about $4 trillion to private equity in the last decade, according to Preqin data, and the money is continuing to pour in. The industry faces more political uncertainty than concerns about the economy, Bonderman, who has donated to Democratic candidates, said at the Los Angeles event.

“But values are not absurd -- they’re not cheap but they’re not absurd,” he said. “With the caveat that who knows what goes on with impeachment, it’s a time for caution but not a time to run for the hills.”

To contact the reporter on this story: Amanda Gordon in New York at agordon01@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Linus Chua, Reinie Booysen

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.