Tuesday, March 3, 2009

PEU Writedowns & Future Obama Wins

Three private equity underwriters (PEU's) wrote down their holdings in the fourth quarter of 2008. Reuters reported:

Carlyle Group-Carlyle Partners IV -14.8%
KKR-Private Equity Investors -30%
Blackstone Group-Private equity portfolio -20%

Yet, these same groups have new infrastructure, financial and distressed debt funds. President Obama has a National Infrastructure Bank ready to provide levered debt. Tax laws and Tim Geithner's public private partnerships benefit firms buying back affiliate's distressed debt. Would you like to pay 30-40 cents a dollar on your mortgage and use a cheap taxpayer provided loan to do so? That's the PEU game.

Carlyle co-founder David Rubenstein and Senior Adviser Arthur Levitt lead efforts to reform the global and U.S. financial system. PEU's win again!