Monday, November 30, 2020

OMB Nominee Thinks Torture Works


President Elect Joe Biden is a forgiving man in his appointment of Neera Tanden for OMB Chief.  PEUReport wrote in December 2016:

 

Neera Tanden:    To tell me that Biden (or his people - unclear to me who) are calling asking for support. Not doing a hard sell. Apparently, he's having some meeting in Washington that he's asking people to attend.  You've probably heard stuff like this, but on the off chance you haven't, letting you know.  Aug 14, 2015 4:49 PM

John Podesta:   Yup. Hunter, Mike Donilon, Ricchetti. Biden can't seem to lean on people. Still can't figure out whether he'll rally himself to do it. Hadn't heard about DC meeting. Losing more sleep over getting straight answers from Cheryl than this.  Aug 14, 2015 at 9:58 PM

Neera Tanden:  I was just at the Tower of London and the Rack seemed to be a very successful strategy for getting straight answers from at least some people.  (Source: Wikileaks e-mail 4115)


It's funny how today's Blue team sounds so much like the Reds.
 

That was before the Red Team catered to President Trump's insatiable ego and vengeful rages.

President Elect Joe Biden's first two staff picks, Ron Klain and Anthony Blinken, came from private equity.  Neera Tanden catered to The Blackstone Group as Hillary Clinton's campaign advisor.  

Private equity underwriters (PEU) invest in both political parties so they can garner a share of the federal wallet no matter who wins office.  Bloomberg Tax reported on 11-5-20:

Private equity managers and their investors, who were concerned about progressive plans to increase taxes and regulation on their industry, are relieved the expected “blue wave” scenario that would have handed Democrats control of the presidency and both chambers of Congress now looks unlikely.

That’s led to jumps in the fortunes five of the wealthiest private equity titans at publicly traded firms since the election as stock prices rose.

The greed and leverage boys supported Tanden's Center for American Progress.

According to the lists CAP shared with POLITICO, the group received significant donations from some top Wall Street outfits — at least $100,000 from Citigroup and Stephen Schwarzman’s private-equity firm, Blackstone, and $50,000 from Bank of America and Goldman Sachs. Wells Fargo gave $5,000. 

Politicians Red and Blue love PEU.  Two of the three architects of PPACA are PEUs.  Tom Daschle's latest PEU job is with Pine Island Capital Partners while Nancy-Ann DeParle is with Consonance Capital.  Tanden is a PEU fan and will be able to steer vast portions of the federal wallet to the greed and leverage boys.

Update:  Glenn Greenwald eviscerated Tanden on a ZeroHedge post.

Sunday, November 29, 2020

PEU Target FANCL

 

 

Reuters reported a spate of private equity underwriters (PEU) bid for FANCL's Asia business:

More than 10 entities, including buyout firms Blackstone and Carlyle, have lodged bids for skincare brand FANCL's Asia business outside Japan valuing it at close to $1 billion, said people with direct knowledge of the matter.

Bain Capital, MBK Partners, Sequoia Capital and CITIC Capital are also among bidders for CMC Holdings, the sole distributor of FANCL Corp's products in Asia outside Japan, the people said, declining to be named as the information is confidential.

With its ENRICH product FANCL appears to be a good PEU fit. 

Update 12-18-20:  Carlyle made the first cut and remains in the bidding for FANCL

Saturday, November 28, 2020

Biden's Cabinet from PEU Pine Island Capital

 

President Joe Biden's Secretary of State Antony Blinken worked for Pine Island Capital Partners and the Defense Secretary nominee could come from the same private equity underwriter (PEU).  Two candidates, Michele Flourney and General Lloyd Austin have been mentioned for the top civilian defense slot.

Pine Island Capital Partners promotes the company as being deeply connected.  Representing the Red Team are former Senators Saxby Chambliss and Don Nickles, while the Blues have former House leader Dick Gephardt and former Senators Tom Daschle and Byron Dorgan.

How did a D.C. based private equity firm with only two affiliates, InVeris and  Precinmac, attract such talent?  Former Merrill Lynch CEO John Thain could shed light on the answer.

FT wrote about Thain after the 2008 financial crisis:

John Thain is giving us a tour of what is soon to become America’s most infamous office, with its $87,000 rug, $68,000 sideboard, $28,000 curtains – all part of a $1.2m redecoration scheme. This was early December, a little under two months before Thain would be fired in the same room by his new boss, Ken Lewis, chief executive of Bank of ­America.

Thain went on to lead CIT out of bankruptcy and currently sits on the boards of Uber and Deutsche Bank.

Biden's appointment of multiple cabinet members from one PEU would be head scratching.  Then again, politicians Red and Blue love PEU, even if they have a lackluster SPAC.

Update 11-29-20:  NYT wrote a piece citing concerns about some Biden cabinet nominees.  PEUReport isn't alone in questioning how all this talent landed at one relatively small PEU.  Politico also did a piece on this.  Recall Obama health reformer continued to profit from her PEU work as a public servant in the White House.

Carlyle After Another Indian Pharma Company

 

Seeking Alpha reported:

  • Carlyle Group is in advanced talks to buy Granules India, a pharmaceuticals maker, for ~$1B, India's CNBC-TV18 reports, citing three sources with direct knowledge of the deal.
  • That would add on to Carlyle's pharmaceutical industry investments after recently acquiring Sequent Scientific and a  minority stake in Piramal Pharma.

It's not clear how Granules might grow Carlyle's COVID-19 profit plans.  Granules does have a clinical research and manufacturing arm as well as a number of FDA approved drug production sites.

Where Americans see high costs, Carlyle sees grand profits.

Tuesday, November 24, 2020

Everyone Cheers for Yellen


Michael Every of Rabobank wrote on ZeroHedge:

Yellen’s long career arc from academic economics to economic advisor to presidents, then to Fed chief, and now to economic chief for a president, has not exactly overlapped with a concurrent period of relative American economic ascent – or at least not for the majority of its population. Yellen of course expressed her concerns over inequality as far back as September 2014: yet the central conclusion of that speech was that the poor would be less poor if only they had more assets.

Reuters reported in April 2018, two months after she left the top job at the Fed:

Janet Yellen cashed in with her first paid visit to Wall Street since stepping down as Federal Reserve chair, discussing rate hikes and U.S. President Donald Trump at events on Monday that included a dinner for 40 at a CEO’s Manhattan penthouse.

Over the penthouse dinner of lobster, beef short ribs and matzo in the trendy Tribeca neighborhood, Yellen held court with executives from hedge funds, private equity firms and companies, according to two people briefed on the gathering.

The greed and leverage boys are front and center in President Elect Joe Biden's nominations.  Loud cheers for President Elect Biden's Treasury nominee.  Everyone loves Yellen, ..  

Politicians Red and Blue love PEU.

Trump Advisor Schwarzman Ready to Profit Under Biden

 


Axios reported:

It's over. That's what Blackstone chairman, CEO and co-founder Steve Schwarzman — one of President Trump's most loyal allies — and other top Republicans are signaling to the defeated president, 16 days after Joe Biden clinched the win. 

Schwarzman said in a statement to Axios that Biden won and it's time to move on

Bloomberg added:

The Trump era has been wildly lucrative for pretty much anyone who’s been invested in markets. Schwarzman has seen his personal fortune roughly double to $20 billion.

Blackstone had the Blue Team covered with Executive Vice Chairman Tony James and President/COO Jon Gray.

Schwarzman's capitulation was greased by President Elect Biden's appointment of two private equity underwriters, Ron Klain (Revolution LLC) and Antony Blinken (Pine Island Capital).  

In case a history rewrite is needed,  Schwarzman's alter ego Mr. Stone served as close advisor to President Trump.

 

 

That frees up the real Schwarzman to profit handsomely under the Blue Team.  Politicians Red and Blue love PEU. 

Sunday, November 22, 2020

Biden's Secretary of State is PEU


President Joe Biden announced his nominee for Secretary of State, Antony Blinken.  Biden is two for two in naming private equity underwriters (PEU) to his administration.  Chief of Staff Ron Klain worked for Revolution LLC.  Antony Blinken worked for Pine Island Capital Partners.  Their website shows Blinken's status as "on leave."

Pine Island Capital Partners offers a differentiated approach to private equity investing in the middle market. 

Pine Island has combined an experienced investment team with a group of deeply-connected and accomplished former senior government and military officials. Each of our D.C. partners teams with the investment professionals to actively participate in sourcing deals, conducting analyses, winning bids, closing transactions, and directly advising the companies in which Pine Island invests.

Blinken used his deep connections to aid the greed and leverage boys.    

Pine Island Capital Partners seeks to invest in attractive mid-sized companies, with enterprise values ranging from $50 million to $500 million, that are positioned to benefit from the deep industry expertise, experience, and relationships that the firm’s partnership model can offer. 
Investments may take the form of a number of different transactions, including buyouts, roll-ups, recapitalizations, asset sales, divestitures, growth capital, and special situations. 

Surely there are talented Americans who haven't prioritized interest and special distributions over employees.  Blinken represents the winners in the U.S. economy over the last four decades.  He is of the executive class that has screwed workers while profiting handsomely.

Somehow FT couldn't find Blinken's PEU background in their story on Biden's announcement.  Blinken and Flournoy founded WestExec Advisors in 2018.  WestExec and Pine Island are intertwined.

Additional Pine Island Capital Partners are under consideration for cabinet slots under President Elect Biden.  Politicians Red and Blue love PEU.  That pattern is yet to break. 

Update 5-10-21:  ABC News reported:

Late last month, secretary of state nominee Tony Blinken reported making more than $1 million from his consulting firm WestExec Advisors, and entered an agreement to divest from the firm, according to his disclosures. 

What about his stake in Pine Island Capital and their funds/affiliates?

Friday, November 20, 2020

Carlyle to Flip European Lingerie Firms, Double Upgrade


The Carlyle Group hired JP Morgan to help sell Hunkemoller after hiring the same firm earlier this year to move Twin Set.  Both are European lingerie companies.


Bank of America gave The Carlyle Group a double upgrade to buy from under-perform.  BOA cited a looming funding super cycle.  More like a PEU pandemic.

Tuesday, November 17, 2020

Taylor Swift Got Mountain Watered by Carlyle Group


The Carlyle Group financed Ithaca Holding's purchase of Taylor Swift's music.  Variety reported Ithaca flipped those master rights for a big payday.

Some 17 months after Scooter Braun’s Ithaca Holdings LLC acquired Big Machine Label Group and all of its recorded music assets, sources tell Variety the veteran manager and entrepreneur has sold the master rights to Taylor Swift’s first six albums. The buyer, an investment fund, is as yet unknown but the deal is believed to be north of $300 million and closed in the last two weeks. Some insiders speculate the value could be as high as $450 million once certain earn-backs are factored in.

Carlyle co-founder David Rubenstein told Fox Business Maria Bartirome he "remained hopeful that the parties would be able to reach an agreement."

I do think there'll be a resolution of that in the near future," Rubenstein said. "Hopefully, [Swift] can continue to do very good music, but it's something that is more complicated than my being able to resolve it right here."

That was December 2019.  Swift shared her efforts to purchase rights to her music. Swift wrote on social media to her more than 87 million Twitter followers.

"As you know, for the past year I've been actively trying to regain ownership of my master recordings. With that goal in mind, my team attempted to enter into negotiations with Scooter Braun,"
 
"Scooters team wanted me to sign an ironclad NDA stating I would never say another word about Scooter Braun unless it was positive, before we could even look at the financial records of BMLG (which is always the first step in a purchase of this nature."
 
"I would have to sign a document that would silence me forever before I could even have a chance to bid on my own work. My legal team said that this is absolutely NOT normal, and they've never seen an NDA like this presented unless it was to silence an assault accuser by paying them off. He would never even quote my team a price. These master recordings were not for sale to me." 
The City of Missoula, Montana tried multiple times to buy Mountain Water before and during Carlyle ownership.  It took a condemnation lawsuit for Missoula to buy their local water supplier.  Swift does not have such a remedy.

Taylor's Army no longer can boycott Golden Goose sneakers or Supreme streetwear and inflict financial pain on Rubenstein's rapscallions.  Carlyle flipped both investments for more big paydays. 
 
PEU Shamrock Holdings informed Swift of their purchase.
 
Swift said that she was only made aware of Braun selling her masters after she received a letter from a private equity company, Shamrock Holdings, letting her know they had purchased her music, videos and album art.
 
"This was the second time my music had been sold without my knowledge." Swift continued. "The letter told me that they wanted to reach out before the sale to let me know, but that Scooter Braun had required that they make no contact with me or my team, or the deal would be off."
 
Swift also posted a photo of a letter she wrote to Shamrock Holdings.
 
Carlyle is consistent in their use of leverage in their greedy pursuits.  If they can roll Taylor Swift multiple times the average American stands no chance. 

Sadly, Carlyle has targeted the coronavirus for profits.  More cases, more serious illness, the more Carlyle cashes in.  President Trump provided a wide lane for The Carlyle Group to profit from American suffering.    

Update 11-20-20:  Carlyle plans to flip European lingerie makers Twin Set and Hunkemoller.  JP Morgan is assisting with the sale of both companies.  Swift's potential boycott pool is shrinking.

Update 12-10-20:  Swift will surprise release her second album this year, Evermore.  The article stated:
Swift is also currently re-recording her first six albums, amid a dispute over the master recordings with music mogul Scooter Braun. She told an American Music awards audience in November, via a video message: “The reason I’m not there tonight is I’m re-recording all of my old music in the studio we originally recorded it.”

Update 4-12-21:  Swift re-released her Fearless album.  Loyal fans are burying the old versions on Spotify.

Following Friday's midnight release of Fearless (Taylor's Version) — for which Swift re-recorded her music after failing to acquire the rights to her early albums two years ago — Swifties launched a campaign to bury the Big Machine version on Spotify.

Hopefully the unnamed investment firm can claw-back money from Ithaca and The Carlyle Group.  Taylor Swift, like the City of Missoula with Mountain Water, tried many times to buy back the rights to her music. 

Monday, November 16, 2020

Carlyle's COVID Profit Plans


The Carlyle Group intends to profit from the global pandemic.  Carlyle's website states:

While the healthcare industry has permanently changed by the COVID-19 pandemic, it has also accelerated key themes that our Global Healthcare team has been consistently focused on for years.

Three healthcare industry themes that we believe have been accelerated by the coronavirus pandemic: 

  1. Increased emphasis on diversified healthcare delivery  (Brazilian hospital operator Rede D'or Sao Luis)
  2. A shift toward digital innovation and digital disruption (Grand Rounds, OneMedical)
  3. The importance of the bio-pharmaceutical revolution  (TriNetX, PPD, Albany Molecular Research, Piramal)

Carlyle failed to mention the other ways it plans to profit from COVID-19.

Carlyle affiliates can conduct retrospective studies on COVID-19 (TriNetX), disinfect surfaces (Victory Innovations), screen airports for people with fever (Schneider Electric & HGH), test for COVID antibodies (Ortho Clinical), assist with blood plasma collection (MAK Systems), produce antibody drug conjugate (Piramal Pharma Solutions), ensure the maximum hospital bill for COVID-19 patients (TrustHCS), manufacture Ivermectin treatment (SeQuent Scientific) and make federal coronavirus purchasing something other than a clown show (Unison). 

Coronavirus tea leaves suggest more PEU profits to come.  Those leave can be wrong.  Recall Carlyle drove LifeCare Hospitals and nursing home giant ManorCare into bankruptcy. 

More investment by the greed and leverage boys is not a good sign for people struggling to pay for healthcare in the United States.  

Update 3-13-21:  The former PECKER Council highlighted PEU entries in COVID-19 care.  PECKER is an abbreviation for Private Equity Capital Knowledge Executed Responsibly.

Sunday, November 15, 2020

Carlyle to Flip Supreme


GQ reported:

Denver-based VF Corporation, which owns Supreme collaborators like The North Face, Timberland, and Vans, as well as workwear brands like Dickies and Napapijri, announced this morning that it will acquire Supreme for $2.1 billion. Supreme’s current investors, The Carlyle Group and Goode Partners, will sell their stakes. You may recall that Carlyle paid $500 million for a 50% stake in Supreme back in 2017; as one writer has already joked, this makes The Carlyle Group the world’s most successful Supreme reseller.

Carlyle's website never listed Supreme as an affiliate.  It did not post stories on its purchase or planned sale of Supreme.  Private equity is contrary to streetwear cool.  That discord grew when Carlyle owned flashbangs and pepper munitions were used on peaceful protesters. 

Carlyle will make at least a double on its Supreme investment.  Depending on the mix of debt and equity the profit multiple could be far higher than a simple 2X.

Supreme will be leaving as The Carlyle Group at an interesting time.  There is a pandemic from which to profit.  

Wednesday, November 11, 2020

Blue PEU Klain Biden's Chief of Staff

 

President Elect Joe Biden chose Ron Klain as his White House Chief of Staff.  Klain is Executive Vice President and General Counsel for Revolution LLC.  Revolution LLC is considered a venture capital/private equity firm.  

PEUReport ran pieces on Klain, the first in 2014 when he was named the Ebola Czar with no public health background.  The second story ran in 2016 when Klain chose Hillary over Biden. 

It's been a little hard for me to play such a role in the Biden demise - and I am definitely dead to them -- but I'm glad to be on Team HRC.

Somehow Candidate Joe Biden forgave Ron and his political rebirth came in a Biden "Here's the Deal" March 2020 podcast. 

Politicians Red and Blue love PEU.  The appointment of Ron Klain as Chief of Staff shows the greed and leverage boys remain firmly entrenched in America's Government-Corporate Monstrosity.

Update 11-12-20:  Revolution LLC's Steve Case presented with The Carlyle Group's David Rubenstein at the Rise of the Rest CEO Summit in November 2019.   Rubenstein should continue his preferred access to the White House under Biden and Chief of Staff Klain.  Also, two potential Biden cabinet members were at the event, Eric Schmidt and Meg Whitman.

"We've become, now, an oligarchy instead of a democracy. I think that's been the worst damage to the basic moral and ethical standards to the American political system that I've ever seen in my life." -- Jimmy Carter

Update 11-19-20:   Erin Brokovich wrote a letter to President Elect Joe Biden chastising him for putting a former DuPont consultant on his EPA Transition Board.  It's a different kind of PEU.

Thursday, November 5, 2020

Jack Ma's Free Speech Hurt Ant Financial IPO, Carlyle Impacted


 Reuters reported:

Corporate China's shiniest star was just days away from seeing his Ant Group list on the stock market in a record $37 billion deal, when he chose to launch a blistering public attack on the country's financial watchdogs and banks.

The regulatory system was stifling innovation and must be reformed to fuel growth, billionaire Ma told a summit in Shanghai on Oct. 24 attended by the great and the good of China's financial, regulatory and political establishment.

Stung by the attack, Chinese regulators and Communist Party officials set about reining in Ma's sprawling financial empire, culminating in the suspension of the IPO on Tuesday, two days before the eagerly awaited market debut in Shanghai and Hong Kong, the sources said.

The Carlyle Group invested in Ant Financial in May 2018 joining other investors in a $10 billion round which valued Ant at $150 billion. TechCrunch reported:

Ant would have sported a possible market valuation of more than $300 billion at its IPO price. Such a valuation would rank it amongst the most valuable companies in the world.

Carlyle's double is delayed at least six months according to FT.

The Carlyle Group's co-founder David Rubenstein built his vast fortune catering to the world's political elite, even employing some of them.  Will Rubenstein try to smooth over Ant Financial's turbulent waters?  Might he coach Jack Ma in the art of apology, given his history with Carlyle Capital Corporation and an angry Kuwait SWF?  

It will be interesting to see how much Ma's honesty costs Carlyle in the end.  

Update 11-12-20:  Chinese President Xi pulled Ant's IPO according to the WSJ.  That will take some serious apology horsepower.  

Update 1-21-20:  Carlyle's big payday from Ant is in jeopardy.

Update 2-9-21:   There is no timeline for Carlyle to cash in on its Ant investment.

Update 3-18-21:  Investor valued Ant Holdings at over $200 billion, down from $315 billion in the run up to the planned IPO.