Saturday, July 18, 2009

Carlyle Group Lobbies Against Stricter EU Regulation

Buyout king Robert Easton of The Carlyle Group argued against European Union financial reforms. The Independent reported:

One of the major concerns is over disclosure of company investments. Any private-equity or hedge fund that has €500m (£430m) in funds under management must report detailed information on any of their portfolio companies that turn over at least €50m.

Mr Easton, the Carlyle Group managing director who sits on the disclosure working group, warned that the directive could end up being challenged by member states. He said: "Our starting point is that the disclosure requirements of the draft directive shouldn't even apply, given that each jurisdiction already has its own laws. Indeed, you might find that the required EU disclosures breach rules at local country level."

Mr Easton added that providing detailed information would be costly. "If you were to apply the €50m rule it would significantly increase the cost burden on many, many companies, and that's quite apart from the pressure on the FSA, which would have to recruit an army of people to oversee it," he said.

Easton's excuse is humorous in that a Carlyle sub has software helping hedge funds comply with any new reporting requirements. It's produced by Brussels based FRSGlobal. Can't they update it for private equity underwriters (PEU's)?

Carlyle has the rumored Obama nominee for America's EU ambassadorship in William Kennard. They have two co-chairs of key groups weighing in on financial regulatory reform David Rubenstein led a global study effort, while Arthur Levitt chaired a domestic industry group.

If it were American reform, Carlyle would be a shoe in for a free pass. Europeans may have more intestinal fortitude than PEU dominated Washington, D.C. Where will Brussels land?