Thursday, August 19, 2010

Carlyle Group Funds Luxury Trips for CalPERS Employees

The LATimes reported that private equity underwriters secretly flew CalPERS employees by private plane to luxury destinations.

Court filings reveal a culture at CalPERS where it was common for large private equity firms such as Yucaipa, the Carlyle Group and Oak Hill Capital Partners to fly CalPERS investment staff around the country and the world, sometimes for what were described as "one on one" strategic meetings.

In addition to the travel, senior portfolio manager JonCarlo Mark testified that he has accepted personal gifts from financial firms and insiders paid by such firms to help them secure CalPERS business.
The Carlyle Group has a history of pension fund pay to play. The LATimes failed to note that CalPERS is part owner of the Carlyle Group, a private equity underwriter. Mubadal Investment Corp, a United Arab Emirates sovereign wealth fund (SWF), also owns a chunk of Carlyle.

Guess what three groups are rolling the dice for big returns? Pension funds, PEU's and SWF's. The same group got sweet treatment in Chris Dodd's financial reform.