The private equity industry is not only employing millions, but it’s also contributing billions of dollars in taxes, a report shows.
The study was conducted by EY in partnership with the American Investment Council, and shows the effect that the private equity industry has on the U.S. economy and the Texas economy.
The industry contributes an estimated $4.8 billion in state and local taxes, American Investment Council’s CEO and President Drew Maloney said in an interview with the Dallas Business Journal.
“I think you have a lot of businesses that are backed by private equity in Texas,” he said. “And they all contribute to the tax base as well as their employees … I think that’s just as it is a very positive contributor to the Texas economy.”
The private equity industry is estimated to directly employ 703,000 workers in Texas, according to the report, who earn an average of $78,000 per year. Texas ranked second in employing the most in the private equity sector, directly behind California, which is estimated to employ 1.1 million.
The American Investment Council also obtained data from PitchBook that showed private equity activity has been steadily increasing in Texas for the past four years, with $110.62 billion of private equity activity in 2018, up from $72.25 billion in 2017.
Maloney explained that there’s a lot of investment in the Lone Star State, and the industry supports a broad variety of businesses from energy companies, such as Ambit Energy, to entertainment companies like Topgolf.
“That’s what we (private equity firms) do is partner with businesses and help them grow,” Maloney said. “And the Texas environment is welcoming to investment. It’s just a very big recipient of private equity investments because of the business climate in Texas.”
For a longer version of this article and other business news in Texas, please visit the Dallas Business Journal.