Monday, February 11, 2013

Carlyle Group Flashback to 2007

Carlyle Group Chief Operating Officer Glenn Youngkin took PEHub down memory lane:

Carlyle also saw the decline in the financial markets coming in 2007, Youngkin says. The global buyout shop took some steps to shore up the firm, including having the partners inject capital, and its portfolio companies.

Carlyle Group co-founder David Rubenstein spoke to BigThink in September 2007.  He weighed in on carried interest taxation.  Rubenstein visited Capital Hill regularly with his implied threats of moving capital offshore and hurting public pension fund returns.  

Oddly, Carlyle hit CalPERS up for $652 million to save its backside in Fall 2008.  That's a staggering sum.  Did it save the firm?  Youngkin didn't say.

Six years after Rubenstein lobbied to save private equity's preferred taxation, the carried interest loophole remains. 

As for Carlyle's portfolio companies, many went bankrupt in the crisis and its aftermath.  Carlyle Capital Corporation was the canary in the coal mine, perishing under a mountain of debt in Spring 2008.  Few of these stories have been told by the media, much less popular speaker Rubenstein.

Carlyle affiliates LifeCare Hospitals (Hurricane Katrina deaths), Synagro Technologies (Detroit sludge bribes), SemGroup (Bad energy bets), Vought Aircraft Industries (Fleecing Texas taxpayers)  and Landmark Aviation (Rendition flyer) all have dark chapters under Carlyle ownership.  Rubenstein loves speeches, but not on these topics. There's face to save.