Thursday, January 24, 2008

Carlyle Turns to NonDemocratic State Owned Companies for Financing

Does anyone else find it odd that private equity underwriters can't find financing for new ventures here at home? One would think the best democracy in the world would have a substantial economic advantage over monarchies. And why would state or government owned firms be sitting on billions in cash, when private enterprise is clearly the better model? The Carlyle Group already sold 7.5% to a government firm in the United Arab Emirates. Carlyle co-founder indicated they will tap similar resources in the near future:

Carlyle Group co-founder David Rubenstein says private-equity firms may turn to sovereign wealth funds and large pension plans to help pay for deals as financing for leveraged buyouts dries up. State-managed funds in countries including Kuwait, Abu Dhabi and South Korea have ballooned to $3.2 trillion in assets, swollen by record oil prices and rising currency reserves. An Abu Dhabi state fund bought a $1.35 billion stake last year in Carlyle, based in the District.

PEU big dog David calls those kingly state owned firms, "sovereign wealth funds." It's the hot topic at the World Economic Forum in Davos, Switzerland. Condi showed yesterday to talk about "American Realism" in the world today. Why does everything seem so surreal?