Saturday, August 31, 2013

Dunkin' Socially Irresponsible

Dunkin' Donuts pulled a blackface advertisement in Thailand for its racial insensitivity.  Dunkin's most recent proxy statement stated:

Dunkin’ Brands strives to be recognized as a company that responsibly serves our guests, franchisees, employees, communities, business partners and the interests of our planet.
Who knew racism was in the best interest of our planet?  The Carlyle Group effectively owned Dunkin' Donuts from 2006 to 2012, when it took its final check for $150 million.  Did six years of Carlyle culture, i.e. greed, lead to this ad campaign?  Dunkin' Board member and Carlyle Group Managing Director Sandra Horbach could shed light on this matter, unless she's the one posing in darkface. 

Obama's PEU Bargain: Lower Affiliate Taxes

President Obama wants to lower corporate taxes, which will help private equity underwriters (PEU's).  This move should get President Obama a number of $200,000 speeches at PEU investors meetings, much like the Presidents Clinton, Past President Bill and Hillary the Hopeful.  Hillary recently spoke at KKR's and The Carlyle Group's annual investor meetings for $200,000 a pop.  Surely, PEU Blackstone will ensure an Obama payday.

Blackstone has poured billions of dollars into the market... buying up thousands of homes at dirt-cheap prices, fixing them up, and then selling them for a profit.

Obama is setting himself up for a PEU life. Which PEU town will he choose for retirement?

Friday, August 30, 2013

PEU Investment Fees Rebound

Financial News reported on PEU fees earned by investment banks:

Figures to August 28 show investment banks have reaped income of $10.2 billion from private equity deals so far this year, the highest level since the same period in 2007 when revenue was $13.4 billion. 

JP Morgan reaped the highest amount of income from these deals, collecting $1.1 billion. Goldman Sachs is ranked second with $982 million, and Credit Suisse received $874 million in fees, according to the data provider.

Fees have been driven by high levels of activity from some of the largest buyout firms in the US. Apollo Global Management is ranked first by fees paid, Carlyle Group second and Bain Capital third. 

The figures include exits, new entry deals, and portfolio company M&A deals, as well as any related equity capital markets and debt capital markets loans, Dealogic said.

Top Ten PEU's are:

1. Apollo Global Management (US) - $607 million
2. Carlyle Group (US) - $485 million
3. Bain Capital (US) - $442 million
4. Blackstone Group (US) - $370 million
5. TPG Capital (US) - $342 million
6. 3G Capital Partners (Brazil) - $331 million
7. CVC Capital Partners (UK) - $318 million
8. Kohlberg Kravis Roberts (US) - $280 million
9. Advent International (US) - $248 million
10. Clayton Dubilier & Rice (US) - $219 million 

Best year since 2007, which had many frothy PEU deals.  What does that portend for 2014?

Wednesday, August 28, 2013

Engler & Carlyle Exec Join Blackford Capital's Michigan PEU

CBS Detroit reported:

Former Michigan Gov. John Engler and three business leaders have formed an advisory board with the Grand Rapids-based private equity firm Blackford Capital to target Michigan-based investments.
Engler's Business Roundtable played nice with the Obama administration on health reform.  Obama White House officials deferred to the Business Roundtable in ways surprising to those who believed Barak Obama's campaign rhetoric in 2008.  BR and the White House are teaming up on immigration reform and lowering corporate taxes, possibly to levels enjoyed by private equity underwriters (PEU's).

2013 finds Detroit defaulting on its municipal debt.  PEU's like economic turmoil.  It provides opportunities to buy companies on the cheap.  The Carlyle Group took advantage of Uncle Sam's wallet under Bush/Obama.  Carlyle milked direct taxpayer subsidies and preferred taxation to grow from $3.3 billion in assets to over $180 billion.

Blackford Capital tagged Mary Petrovich, Carlyle Group Senior Advisor, for their advisory board.  Carlyle is seeding a number of targeted PEU firms from homeland security to Michigan-based investments.   PEU's are ubiquitous and beloved by politicians Red and Blue.

Monday, August 26, 2013

Professional PEU Sports

Private equity underwriters (PEU's) may not only own your rental home, they could be the owners of your favorite professional sports team.  The New Jersey Devils' new PEU owners come from Apollo Global Management and Blackstone.  Dealbook reported on other PEU professional teams:

A group of private equity moguls, including Bain Capital’s Steve Pagliuca, already owns the Boston Celtics. And Tom Gores of Platinum Equity controls the Detroit Pistons alongside his firm. Since 2002, the principal owner of the Boston Red Sox has been John W. Henry, who took over Liverpool Football Club in the fall of 2010.

How might you be supporting a billionaire's trophy properties in our PEU world?   

Update 4-19-22:  A Russian oligarch put Chelsea FC up for sale and one bidder is U.S. oligarch Bain Capital's Steve Pagliuca.  Carlyle's David Rubenstein may team up and bid for the Washington Nationals MLB team.

Wednesday, August 21, 2013

Hillary's PEU Cred Strengthens with Carlyle Group Speech

Hillary Clinton will be a featured speaker at The Carlyle Group's investor conference in September.  This follows Clinton's talk at KKR's investor conference.  These $200,000 speaking events speak to Hillary's PEU cred.

Hillary follows Madeline Albright as a Carlyle Group headliner.  Some days it's hard to tell the difference between the CGI's, the Carlyle Group Investor and the Clinton Global Initiative meetings.  Red and Blue love PEU

Monday, August 19, 2013

PEU Rental Country

FT reported a crack in The Carlyle Group's 30% annual return meme from untimely real estate investing:

Carlyle told investors a few months ago that they should expect to receive no more than 40 cents on the dollar on its second €763m real estate fund focused on Europe. 
I expect journalist Henny Sender to pay the price for publishing anything negative about The Carlyle Group.

Consider the bizarre world Sender reveals, where PEU's invest in rental real estate:

Blackstone is moving on to apartment complexes, and in mid-August it bought a $2.7bn portfolio of them from a unit of General Electric.

To further lower Blackstone’s own cost of funds, it is looking at securitising the cash flows it receives from renting out the $6bn of single family homes it has bought, repaired and leased out. 

Next up, PEU towns and regions.  Will you live in Blackstone or Carlyle country?

Update 10-24-13:  Carlyle recently announced investing in trailer parks and up to $1 million housing in Atlanta's north side.    

Update 6-9-22:  


Saturday, August 17, 2013

Never Hear Disclosures Because They're Never Stated

Former Congressman Ron Paul spoke to the insidious nature of what I call the Government-Corporate Monstrosity, Dwight Eisenhower's MIlitary-Industrial Complex engorged by trillions in federal steroids.  Dr. Paul targeted the media: 

"Some of these major (television) stations, their consultants about the military or foreign know they've been in the Pentagon but now are with some manufacturing firm.  You never hear the disclosures there." Ron Paul, MD.

In addition to manufacturing firms, there are their owners, many private equity underwriters (PEU's).

Take Frances Townsend. a Homeland Security Advisor to CNN.   She proved her incompetence from a public accountability standpoint with her hapless White House Lessons Learned Report on Hurricane Katrina.  Who leaves out the hospital with the highest death toll, 35 deaths in Tenet's Memorial Medical Center?  Townsend did in February 2006.  Roughly one year later Jeb Bush was added to the Tenet's Board of Directors.  Twenty five of those deaths belonged to LifeCare Hospitals, owned by The Carlyle Group.

As for what's never disclosed, Fran sits on the board or advises SIGA Technologies, Scientific Games, DRS Technologies, SAP NS2, MacAndrews  Forbes, and Monument Capital. Monument Capital specializes in buying and selling homeland security oriented companies.

NPR hosted Former Ambassador Tom Pickering, recently seen defending Hillary Clinton on Benghazi.  NPR wanted Pickering's perspective on Egypt's implosion into chaos.  Pickering is co-chairman of the International Crisis Group, a nonprofit group established in 1995 to inform on global conflicts.

"Any commercial or economic crisis creates business opportunity." - Frances Townsend on CNN

As Fran noted, with crisis comes opportunity.  Pickering is a Strategic Advisor at NGP Energy Capital Management.  The Carlyle Group invested in NGP in December 2012.

In early 2010, NGP Energy Capital Management initiated the formation of NGP Global Adaptation Partners, which focuses on evaluating investments in two sectors linked to the need for the world to Adapt to a changing planet: Water Resources & Services and the Food & Agriculture industries.

Dr. Paul is correct.  Red and Blue love PEU and neither see a reason to disclose. 

Wednesday, August 14, 2013

CGI "Confesses" Past Transgressions to Create More in Future

The NYT ran a piece on "conflicts of interest" at the Clinton Global Initiative.  Let's be clear, the Clinton's, like the Bush's before them, live in a perpetual conflict of interest stew.  Bill Clinton's wealth potential is now magnified by Hillary's outsized speaking fees to the KKR's and Teneo's of the world.  Bill and Hillary give corporate and private capital chieftains access to Blue team officials, while Jeb and company cover the Reds. 

The NYT story is a fake "come clean, we'll start running Bill's baby professionally" story.  It sets the Clinton's up to reload CGI to ride Hillary's already ethically challenged wave and build Chelsea's credibility as a power broker for corporations.  Somehow the NYT couldn't find Chelsea's board seat at IAC.

Update 11-29-14:  Hillary's $300,000 speech at UCLA benefits the family foundation and reveals the disturbing aspects of America's Goverment-Corporate Monstrostity (GCM)

Update 9-6-15:  As the Clinton's move forward it can be instructive to look back

Update 11-5-16:  As far back as 2008 CGI leaders knew of ethical conflicts and failed to address them.

Sunday, August 11, 2013

Carlyle Group Wants to Earn Fees on Everyone's Money

Carlyle Group co-founder David Rubenstein stated in his PEU's 2nd Quarter earnings call:

"We will slow down fundraising only when every single person on the face of the earth is already a Carlyle investor. Until that, we're not going to slow down."

It's another good line for Carlyle's biggest salesman and apologist.  Post-financial crisis Rubenstein compared easy credit to being "like sex," where seasoned financial experts couldn't say no.   How many on the "face of the earth" will recall this before plucking a portion of their hard earned retirement money into Carlyle PEU?  It would help Carlyle's billionaire founding troika grow their already sizable mountains of cash in retirement.

For some reason the Washington Business Journal writer heard "face of Europe."  Anyway, the pressure's on for Blackstone's Stephen Schwarzman to out joke his peer and competitor.  It's a PEU world, one with a darkly comedic side.  

Saturday, August 10, 2013

Carlyle's Arabian Image Polish

Arabian Business had its choice of Reuters stories to publish on The Carlyle Group's second quarter:

1.  Abu Dhabi-backed Carlyle Group returns to profit in Q2 

2.  Carlyle profit misses estimates; prospects for U.S. deals poor

Guess which one it ran on behalf of One Carlyle, now up to $180.4 billion in management.  If you chose #1 you have some understanding of how the PEU game is played.  The journalist who wrote #2 diminished his chances of getting an interview with a Carlyle co-founder or a hot PEU lead from their image obsessed PR people.

PEU's Looking to Moms and Pops

Barron's gave Carlyle Group co-founder David Rubenstein a stage to sell PEU investments to the little people.  Rubenstein is likely grateful to Barron's Chad Dowling for the free ad.  :

What's the logic behind widening the investor base to nonaccredited investors?

Today, if you are to be an accredited investor, you need to have roughly $1 million of net worth or about $250,000 of annual income. The theory is if you have that much money, you are reasonably sophisticated. But that is a little unfair. Let's suppose you inherited $10 million, but that you aren't attuned to financial markets. You can put your money into a private-equity fund because you are an accredited investor. Now let's say you are a public-school teacher, you don't earn much, and you are not an accredited investor. But you know markets, which you studied in college. It is unfair that this person, who is very smart and sophisticated but doesn't have a high net worth, can't get the benefit of a higher rate of return. And that person probably needs the higher rate of return more than the wealthier person does. There is going to be political pressure on the government, including the Securities and Exchange Commission, to modify the types of people who can go into these products. 
The political pressure will come from the PEUniverse, not the small investor.  The Rubenstein's of the world want to cash in their PEU stakes and may need little people to again enrich them handsomely (BankUnited, Boston Private, Booz Allen Hamilton are but a few Carlyle affiliates benefiting from Uncle Sam's largess). 

Monday, August 5, 2013

WaPo Paper to Bezos, Graham to Pick New PEU Name

Amazon founder Jeff Bezos will buy The Washington Post newspaper and associated digital content.  The company trading as WPO will pick a new name.  Bezos promised not to change the newspaper's values.  That means not writing about Bilderberg while in attendance at the event, even when the meeting is in WaPo's backyard and Donal Graham is in attendance.

I don't want Donald Graham throwing up his hands, struggling to rename his PEU empire.  So I'll offer a few ideas:

The Cracker Group LLC
Monument Capital (already taken by a virtual Carlyle Group affiliate)
Whitberg, Bilderbread and Forneycation Capital Advisors
PEU-PO Asset Management

I'm sure Graham will hire a firm to create a name from scratch, like Carlyestone, Blackhole Group or RiverFoam Investments.  Personally, I'm sitting on the edge of my chair in anticipation of a new name slowly pouring from WaPo's ink smeared pages.  That's it!  Heinz-CatchUp-Hunt Brothers.

Update 10-25-23:  A Bono, Bezos, Gates company intended to revolutionize trucking may be going under.  Convoy will "shut down core business operations immediately while some staff would be retained to wind down operations and for potential future strategic options."

Sunday, August 4, 2013

Revolving Door: U.S. Government to Albright Stonebridge

Crain's Detroit Business reported:

Veteran Detroit lawyer Nicole Lamb-Hale has joined Madeleine Albright's Washington, D.C., advisory firm.

Lamb-Hale joined Albright Stonebridge Group in May after stepping down from her position as assistant secretary of commerce for manufacturing and services at the U.S. Department of Commerce, International Trade Administration. She previously served as deputy general counsel for the department.

In her new role, she'll serve as a liaison between U.S. regulators and clients looking to make foreign investments
Madeleine Albright has a private equity underwriter within her corporate umbrella, Albright Capital Management.  Will Mrs. Lamb-Hale aid Madeleine's PEU in this role?   Can Lamb-Hale say African power?

Oddly, a Carlyle Group executive was the lead story on Crain's page.  Albright headlined Carlyle's annual investor meeting several years ago.  It's a small PEU world.