Private equity is pouring more money into Washington, investing in a group of polling, public relations, lobbying and political consulting firms.
Seidler Equity Partners, a private equity firm based in California, has taken a minority stake in a conglomerate of 10 firms. They include Public Opinion Strategies, a leading Republican polling firm; GuidePost Strategies, a bipartisan lobbying firm; and Bullpen Strategy Group, a consulting firm led by the GOP operative Joe Pounder.
Seidler’s investment will allow the conglomerate — known as GP3 Partners — to buy more companies in an effort to become a bigger player in Washington, said Darrell Lauterbach, GP3’s president and chief executive. The idea is to serve clients better by offering wider array of services under one umbrella.
“We’ve got 10 firms now,” Lauterbach said in an interview. “We will have probably 16 in fairly short order.”
The deal is one of a series of private equity investments in Washington’s influence industry this year.
Coral Tree Partners, a Los Angeles private equity firm, took a stake in the lobbying firm Subject Matter earlier this year. And the consulting firm Hamilton Place Strategies merged with four other firms in September in a deal backed by Falfurrias Capital Partners.
K Street is highly fragmented, with hundreds of lobbying, law, communications and political consulting firms — many with only a handful of staffers — competing with each other for business.
The recent private equity deals are a departure from previous attempts to consolidate, in which massive media conglomerates such as WPP simply snapped them up. Such acquisitions have often struggled after the firms’ founders departed, though: WPP bought Quinn Gillespie & Associates, a top George W. Bush-era lobbying firm, only to lay off most of its staff in 2017.
GP3 declined to disclose the size of Seidler’s investment. But Lauterbach described it as a way to invest in Washington while avoiding the pitfalls of buying consulting firms outright.
The partners at Public Opinion Strategies, GuidePost and the other firms are “still running the shop,” Lauterbach said. “It’s not like it’s been co-opted by a private equity firms that’s now controlling the shots.”
The other firms in the conglomerate are 50 State, 76 Group, Ascent Media, FLS Connect, IMGE, Red Maverick Media and Strategic Partners & Media.
The firms’ political clients this cycle included the Republican National Committee, National Republican Senatorial Committee, the National Republican Congressional Committee and the campaigns of lawmakers including Sens. Tim Scott (R-S.C.) and Rand Paul (R-Ky.), according to campaign finance records. Their corporate clients have included Ford Motor Company, Comcast, ExxonMobil and Darden Restaurants, the company behind Olive Garden and the Capital Grille, according to lobbying disclosures and the firms’ websites.