Thursday, May 13, 2010

Carlyle Group Building Ports Portfolio

Bloomberg reported The Carlyle Group is one of five reported likely bidders on Istithmar’s port and shipping agent, Inchcape Shipping Services. Istithmar describes Inchcape as "world's largest private Marine Management services provider." Inchcape Shipping has 237 offices in 60 countries around the world. They serve the following U.S. cities (according to their website):

Corpus Christi
Houston Headquarters
ISS Global AMS and ENOA/D Service Center-Portland
ISS Machinery Services Ltd. New Jersey
ISS Service Centre - Houston
Jacinto Port
Lake Charles
Long Beach
New Orleans
New York / New Jersey
Point Comfort
Port Everglades
Portland, Maine
San Francisco
San Juan
Seattle WA
Portland OR (USA)
St. Croix
Morehead City

How might this help Carlyle should they win Inchscape from their Dubai based owners? Tapped out state governments are looking to monetize public infrastructure. The Carlyle Group submitted a conceptual proposal to operate Virginia's ports in 2009. Galveston, Texas may soon seek bids from "private partners."

Carlyle's Virginia aspirations may get a boost from the chair of the Governor's Restructuring Commission, an ex-Carlyle Senior Advisor. State governments are bad at due diligence with politically connected, but ethically challenged private equity underwriters (PEU's). Connecticut inked a deal with Carlyle on 23 rest stops, this despite direct experience with their nefarious behavior.

This wouldn't be the first deal between Carlyle Group and Istithmar World. Carlyle sold U.S airport operators, Landmark Aviation and Standard Aero, to Istithmar affiliate Dubai Aerospace in 2007.

The airport deal occurred between the Dubai Ports World outrage and the NASDAQ/Dubai Bourse sales uproar, only Carlyle's deal warranted barely a peep. The Bush White House said nothing, despite being very concerned about smuggling through Dubai.

After his apoplexy over the Dubai Ports sale, New York Senator Chuck Schumer blocked for the airport deal. Schumer's PEU water carrying role continued with his defense of private equity's preferred taxation on carried interest.

Even though they hate taxes, PEU's love to suckle on the government teat. Inchcape hangs on that very bosom.

Watch Inchcape to see which PEU wins.

Update: Carlyle dropped out of bidding for Inchcape. Cinven Group and CVC Capital are the only remaining bidders.