Wednesday, August 29, 2012

Carlyle Group, Hellhound Leech Federal Money

Bloomberg reported:

Carlyle Group LP (CG) and Cerberus Capital Management LP, the two biggest private equity firms in federal contracting, own or control companies that had $8.9 billion in U.S. awards last fiscal year, government procurement data compiled by Bloomberg show.

Both Cerberus and Carlyle are chock full of ex-government insiders.  They know where the money is.  Carlyle and Cerberus have over 50% of PEU government revenue, according to the estimate:

Contractors controlled by private equity underwriters (PEU's) receive about $16.8 billion in annual revenue.
Carlyle has long pursued this tack, buying USIS (1999), United Defense Industries (1997) and Vought Aircraft Industries 1997.  President and PEU Bill Clinton set USIS free from government shackles

How many people know TARP helped Cerberus and The Carlyle Group?  I would bet very few.  They may be aware public pension funds invest billions in PEU's.  Carlyle made big money flipping its USIS holdings.

The Carlyle Group may have enough billions on the sidelines to profit from any looming fiscal cliff.  Watch Carlyle's moves in healthcare, transportation and infrastructure.  They do like buying assets on the cheap, especially those with links to Uncle Sam.