Saturday, May 23, 2009

KKR Interested in Public-Private Infrastructure Deals

NPR talked about the huge amounts China's stimulus plans put into public infrastructure. The Obama stimulus plan is but a fraction of China's. Why? Obama wants to steer infrastructure to the private sector. He'll provide funding via a National Infrastructure Bank.

Who's interested? It's the usual smattering of PEU's, private equity underwriters. KKR, The Carlyle Group, Blackstone, and Goldman Sachs. Foreign versions, like Macquarie, are ready to play.

The Obama team changed rules so PEU's can majority own thrifts, savings & loans or credit unions. The FDIC will provide guidance on how PEU's can buy banks. The Fed currently restricts them to no more than 24.9% ownership without converting to bank holding company status.

President Obama rolls out the red carpet for the big money boys. Remember, not all shadow bankers are the same. There are variations of greed and leverage. Note: Hedge funds are evil, while the PEU boys are Supermen, standing ready with billions in cash to save the day. The world has gone flippy floppy.