Shaks Ghosh is learning the lingo of leveraged buy-outs. Since the former head of the homeless charity Crisis took over as chief of the Private Equity Foundation 10 weeks ago, she has been discussing leverage, debt and due diligence with her new bosses.
The “masters of the universe” who lead the City’s biggest buy-out houses have turned to Ms Ghosh to fix their image problem. The foundation they set up last year has raised £5m for charity. But it is widely seen as an own goal by the industry.
At a dinner in January for donors, unions gate-crashed the party by protesting outside. Bankers, lawyers and consultants grumbled about paying more than their private equity hosts for tables, while the entertainment of a Cirque de Soleil “vertical ballet act” was depicted in the media as a pole-dancer.
Ms Ghosh has three immediate goals. The first is to use her leverage over the private equity industry – created by the public backlash against it – to persuade more of its members to increase the money and time they give to charity.
She admits the foundation was “caught in a storm” amid accusations from unions that private equity was stripping assets, cutting jobs and dodging taxes, while remaining clouded in a veil of secrecy at companies it bought, such as the AA.
“I need to be really smart and to turn that into an opportunity,” she says. “They are really not as evil as the media or unions are showing them to be. There is a fantastic opportunity for them to demonstrate they are giving something back.”
Second, she wants to convince her bosses of their debt to society. “When I tell them that in London, where they work and earn all this money, 50 per cent of children are born into poverty, they are all very shocked.”
The foundation, she says, needs to identify itself with “a strong emotional call”, which is likely to be around the themes of young people, education and training. “The knowledge economy train is hurtling forward, but some people are going to fall off that train. They need extra help. It is about building that emotional case.”
Ms Ghosh’s third goal is for the private equity bosses and the many specialists they employ to use their due diligence skills to help charities improve, notably by donating their services.
She recalls: “I went to see some guys in a bank yesterday and one said to me: ‘Shaks, you are working for 30 of the most powerful businesses in the UK, which could command the whole City to get on this bandwagon, if you play your cards right’.”
Because it raised just £5m, the foundation suffers unflattering comparisons with Ark, or Absolute Return for Kids, which was set up by big hitters in the hedge fund industry and last month raised £26.6m.
But Ms Ghosh is confident that by January the foundation will come close, or even beat Ark’s total. “If we want to make serious social change, £5m a year isn’t going to do it. These guys know this. We can raise much more now,” she says.
“I don’t know if it will be more or less than Ark – I know there is rivalry between private equity and hedge funds – but I don’t really mind. What I want is to be around in 10 years and to make a real difference. We can make history.”