Tuesday, April 8, 2014

Mrs. Rubenstein Buys Anchorage Daily News

Alice Rogoff, the wife of Carlyle Group co-founder David Rubenstein, approached McClatchy with an offer to buy the Anchorage Daily News, Alaska's largest daily newspaper.  They agreed on a $34 million deal which includes the newspaper's building.  Rogoff plans to sell the building after the deal closes.

Investment tea leaves show Carlyle going after global energy assets.  Carlyle has held pipeline companies and LNG providers.  Alaska is pursuing both.

Ukraine and Western Europe are already in play. Bloomberg said Carlyle's energy shopping spree is driven (in part) by:
Commodity traders are investing in infrastructure to expand their trading opportunities and secure supplies.

Carlyle owns a commodity trader, which lost clients huge money in bad energy bets.  They expect those fortunes to turn.

Rubenstein speaks regularly on how Alaskans can prosper economically.  How might a widely read Alaskan newspaper in the family help Carlyle's cause?  One, it could advocate for private equity underwriters (PEU's) given his lament that private equity underwriters' have been unable to explain their model in a way that ensures universal accolades.

Two, it could advocate for any energy positions Carlyle International Energy seeks in Alaska.

Three, Carlyle has an infrastructure fund searching for investment opportunities.  Alaska could be one place those funds are mobilized.

Four, Alaska has the Permanent Fund from oil production.  Carlyle would love to invest a larger chunk of those public monies.

Five, Alaska is close to Russia.  The geopolitical chess pieces are in play.  I don't think Mrs. Rubenstein can see Russia from her house, but proximity is a plus for global tamperers. 

Russia's stress could be increased by Western moves.  Think what Wall Street and their PEU brethren did to obliterate Libya's sovereign wealth fund.

Mrs. Rubenstein said she wanted to use the paper to “do more journalism, more multimedia and more stories about Alaska.”  What happens when the story involves her husband and Carlyle Group investments?

Here's a blast from the past.  Before founding Carlyle David Rubenstein profited on the backs of Alaskan natives.

In 1984, a law was passed allowing native corporations in Alaska—that is, Eskimo owned companies created by Congress to manage native lands—to sell their losses to businesses looking for tax write-offs. The Marriott executives, working with David Rubenstein at Shaw Pittman, discovered the Eskimo clause and vigorously bought the losses to offset gains. The adventure has become known in some quarters as the Great Eskimo Tax Scam.
It's the evolving Arctic which aims:

To investigate the progress of development in the Canadian Arctic and the needs to support an expanded shipping season for cruise ships, resource extraction and the potential traffic using the North-west Passage as a shorter shipping route. The Seminar will consider the resources in place for Search and Rescue, Oil Pollution Response, Ice-breaking, Ice-navigator services, re-fuelling, ship repair and places of refuge. Discussions will consider requirements for investments in infrastructure and regulatory regimes to protect seafarers, the fishery and the sensitive environment, resources and communities.

If past development is indicative of future development one thing's for sure.  Rubenstein and his PEU brethren get richer.

Update 4-14-14:  David Sirota picked up on this theme with his piece on Carlyle's huge presence in Alaska. 

Update 5-24-14:  The Alaska Permanent Fund entered into an up to $750 million account with Carlyle Group , approved in July 2013, to target natural resources, metals and energy.