Friday, October 31, 2008

PEU Bonuses Up

The Grim Reaper is yet to visit private equity underwriters (PEUs). He made Wall Street investment houses pay for their greed and leverage. Since things remain "bright" in PEU land, bonuses are up. Dealbook reported:

Senior associates, a.k.a. first year M.B.A.s, are earning an average $435,000, including bonuses, a 4 percent increase over their 2007 levels. Principals at large buyout firms are also walking off with a salary increase of 4 percent, on average $885,000, not including bonus.Their bonuses, meanwhile, spiked 6 percent, to an average of $607,000.

Do investors in Carlyle Capital Corporation or Blue Wave Partners feel as bright about private equity, given those firm's failures? The Carlyle Group also lost SemGroup to bankruptcy. Billions of losses from energy hedging, bets on the directional price of natural gas and oil, sent the company under.

PEU Principals will take home $1.5 million between salary and bonus. How much is classified as "carried interest", requiring only a 15% capital gains tax rate? Chuck Shumer, Evan Bayh and other CorporaDemocrats joined investor class Republicans in keeping this tax loophole open for the PEU boys.

Corporafornication happens, sometimes in bi-partisan fashion.