Thursday, September 29, 2011

Planet Clare

The Carlyle Group's Peter Clare spoke at the Dow Jones Private Equity Analyst Conference in New York.  Consider his words from the WSJ:

"... corporations are flush with cash and are hungry for growth."

The "lack of growth" speaks to a recession, the "flush with cash" not so much.

"Almost every time is a good time for private equity. When times are terrible, it's always good to be a buyer and when times are good, it's a good time to be a seller," said Peter Clare a co-head of Carlyle's buyout group.  
Carlyle monetized scores of affiliates in 2010 and 2011, leading one to believe those times were good.  Not so, according to Clare's boss, David Rubenstein.

The heads of two of the world's most powerful private equity firms issued a dire report on the U.S. economy on Wednesday, signaling problems for political leaders and their own firms' ability to realize profit on their portfolios.

"We never really emerged from the last recession," Carlyle Group co-founder David Rubenstein.
Carlyle is doing its part to extend the recession by dumping jobs and worker benefits.  This made Rubenstein's comment more galling.

"It will last a few more years before we get unemployment to a level that is tolerable," Rubenstein said.
How many pension and health insurance benefits will Carlyle affiliates have dumped by then?  Planet PEU sports the race to the lowest global common denominator on worker pay/benefits, taxes and regulations. 

While PEU's eliminate jobs, exporting many to China, Clare's other boss dangled $1 billion to address the chronically unemployed.  Carlyle co-founder William Conway failed to see the irony of his offer.  Add that Carlyle's Pee Wee Herman look-a-like pushed the idea on Fox News and things got darkly comedic.

Update 10-13-11:  Peter Clare added Carlyle made speedy, profitable exits from investments made in the 2008-09 financial downturn.  It turns out healthcare, Chinese and Indian, are attractive due to their growing middle classes.

Update 2-11-12:  President Obama will call for lower corporate income taxes.