Rethinking the Term \'Private Equity\'

Is the private equity industry ready for a name change

Stephen A. Schwarzman, the chief executive of the Blackstone Group, thinks it might be.

On a conference call on Thursday, Mr. Schwarzman discussed the private equity industry’s image, which was tarnished last year during the presidential campaign. A possible remedy, he suggested, might be found in the re-branding of so-called activist investors, who were known as corporate raiders in the 1980s.

“We could actually learn something from these guys in terms of renaming themselves,” Mr. Schwarzman said. “Private equity apparently doesn’t have as attractive a marketing name as activists.”

“Just the name change makes these guys better,” he added.

With many of the big private equity firms now publicly traded, the once-secretive industry is becoming more image-conscious. The criticism was palpable in the recent presidential campaign with the scrutiny on Republican candidate Mitt Romney, who used to run Bain Capital

“We need to have a pristine reputation,” Hamilton E. James Jr., the president of Blackstone, said on a separate call on Thursday, while discussing regulation. “We need to be in an industry that’s widely trusted.”

The private equity industry’s current moniker was adopted after a similar period of public criticism more than two decades ago. Known as leveraged buyout firms in the 1980s, these investors adopted a more neutral-sounding name after they became seen as symbols of Wall Street greed.

So, what could the private equity industry be called

Mr. James offered a half-serious suggestion: “clarity equity.”