Tuesday, December 22, 2020

Center for Presidential Transition Headed by Former Carlyle PEU

reported on a podcast from Ted Kaufman, the head of President Elect Biden's Transition Team.  Former Senator Kaufman spoke with David Marchick, the Director of the Center for Presidential Transition.  Marchick is a former Managing Director and Global Head of External Affairs for The Carlyle Group. a politically connected private equity underwriter (PEU) .

Mr. Marchick spent 12 years at the Carlyle Group and most recently served as Managing Director and Global Head of External Affairs and as a Member of Carlyle's Management Committee. He led Carlyle's regulatory and government affairs, communications and branding, and sustainability efforts.

The Biden Team has a PEU Chief of Staff, Defense Secretary, Climate Czar and Secretary of State.  Carlyle's Frank Carclucci was once a Defense Department Chief.  In the old days PEUs went from government service to private equity.  Now they go from the greed and leverage boys to public service.  That doesn't ring right.   

The Advisory Board for the Center for Presidential Transition is chock full of PEUs.  Nearly all the top positions are tied to the greed and leverage boys in some manner.   People is policy, especially when politicians Red and Blue love PEU.

Update 3-14-21:  The PEU boys got a mention in Senator Sherrod Brown's Wall Street vs. Workers speech.

Update 7-16-22:  American University and just hired former Carlyle Group Managing Director David Marchick as Dean of AU's business school.  

Saturday, December 19, 2020

Jen Psaki Blue PEU Defender

President Elect Joe Biden's Press Secretary Jen Psaki once defended candidate Barack Obama's July 2007 meeting with private equity underwriters (PEU) on Nantucket.  The Hill reported:

At a dark-shingled mansion, one of many tucked along Washing Pond Road on this island’s north shore, Sen. Barack Obama (D-Ill.) met a couple hundred of the nation’s wealthiest Democrats at a $1,000-a-plate fundraiser on Friday to explain why he should be president even though he’ll raise their taxes.

Many residents with summer homes here have made fortunes from private equity deals and hedge funds.

The host of Obama’s fundraiser, Louis Susman, sits on the executive advisory board of Edgewater Funds, a private equity firm based in Chicago, according to the firm’s website.

Flash forward to November 2019.  Cape Cod Times reported:

Joe Biden is back on Nantucket for Thanksgiving, this time as a candidate for president of the United States.

Biden and his wife, Jill, spent some time shopping downtown Monday and Tuesday afternoons.

The location of the family’s stay this year is being kept under wraps. During his time in the White House, it was the Washing Pond home of Louis Susman, former ambassador to the United Kingdom and Democratic Party fundraiser, and later, the Abrams Point compound of Carlyle Group co-founder and prominent Washington, D.C., philanthropist David Rubenstein.

PEUs Susman and Rubenstein hosted Joe Biden in the past.  December 2019 found Barack Obama purchasing an $11.75 million home on nearby Martha's Vineyard.

President Elect Joe Biden appointed a smattering of PEUs to his cabinet, Chief of Staff, Secretary of State, Defense Secretary and Climate Czar).  Biden's Press Secretary has a history of defending the PEU class.  

The greed and leverage boys did very well under President Obama and expect to do likewise under President Elect Biden.  The rest of us, ot so much.

Update 3-14-21:  The PEU boys got a mention in Senator Sherrod Brown's Wall Street vs. Workers speech.

Friday, December 18, 2020

Rubenstein's Declaration Partners Goes Crypto with Paxos

Carlyle Group co-founder David Rubenstein invested in blockchain and cryptocurrency play Paxos.  Rubenstein used his family office Declaration Partners, the lead partner in Paxos Class C funding.  The mover came after selling over 10% of his Carlyle Group holdings in the last month.

Rubenstein and The Carlyle Group used both Red and Blue political parties to grow their fortunes.  Red Team supporter Peter Thiel recently made big money with Palantir's IPO.  He hopes to repeat that with his Paxos investment. 

Prior to the Paxos investment Rubenstein's Declaration Partners invested in Vault, which makes a saliva test for COVID-19.  USA Today ran a story on Vault's DNA test for COVID and how the company is not collecting personal DNA for later use.  This story may be worth monitoring over time.

Update 5-26-21:  Rubenstein said cryptocurrencies are here to stay on CNBC.  Did he declare his personal conflict of interest with his holding in crypto broker Paxos? 

Update 8-30-21:  “I wouldn’t recommend anyone invest in cryptocurrencies,” John Paulson told David Rubenstein, co-founder of Carlyle Group, on Bloomberg TV.

Update 4-11-22:  Rubenstein said the crypto "genie is out of the bottle."   Rubestein's three wishes are for more money, more money and more money.

Update 5-27-22  Paxos received a federal trust charter from the Office of the Comptroller of the Currency.  Paxos National Trust entity is a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services.  It is different from New York Department of Financial Services-chartered Paxos Trust Co.

Thursday, December 17, 2020

Trickle Down Fiction, PEUs Cash In

CBS News

Tax cuts for the wealthy have long drawn support from conservative lawmakers and economists who argue that such measures will "trickle down" and eventually boost jobs and incomes for everyone else. But a new study from the London School of Economics says 50 years of such tax cuts have only helped one group — the rich.

The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates. 

Carlyle Group co-founder David Rubenstein made numerous trips to Capital Hill to keep private equity's preferred carried interest taxation.  Politicians Red and Blue granted billionaire Rubenstein's request.  Rubenstein recently cashed in over 10% of his Carlyle Group stock.  Hen sold 4.75 million shares before tax hikes could occur.

WSJ reported on an unusual private equity move during our current crisis.

When the economy struggles, businesses typically hunker down and preserve cash by cutting spending and dividends. During the Covid-19 slowdown, companies controlled by private-equity firms have often gone the other way, borrowing heavily to pay big dividends to their owners. 

 The payouts boost returns for private-equity firms but can load their companies’ balance sheets with heavy debt at a precarious moment. The maneuvers can leave companies in weaker financial shape, while helping private-equity firms lock in gains, often a few years after their initial investments. 

 The amount of issued debt tied to such payouts, known as dividend recapitalizations, grew to more than $29 billion this year, up more than 25% from 2019, according to S&P Global Market Intelligence’s LCD. 

The payout boom is striking considering the pandemic’s economic disruption. By comparison, during the last recession, in 2008-09, such activity nearly dried up, the data shows.

Private equity underwriters (PEU) and their founders cashed in during the pandemic, helping the rich keep more of their riches and exacerbating income equality.  President Elect Joe Biden's cabinet is chock full of PEUs.  They generally look after their brethren.  The greed and leverage boys are tight.

Biden Climate Czar is PEU

President Elect Joe Biden will name Gina McCarthy as his White House "climate czar", making the former head of the Environmental Protection Agency his top domestic climate coordinator.  Gina McCarthy became a private equity underwriter (PEU) in June 2017.  The press release stated:

Former United States EPA Chief Gina McCarthy is joining private equity firm Pegasus Capital Advisors as an Operating Advisor, announced the firm today. 

“Pegasus has by far the most talented group of operating and strategic advisors that I’m aware of working in the Sustainability and Wellness sectors, and I look forward to joining the team,” said McCarthy. “I’m excited to put my public service and academic experience to use in the private sector, which is increasingly where most innovation is happening.” 

Pegasus is a private equity firm founded and led by Craig Cogut. Since inception in 1996, Pegasus has invested across five private equity funds and currently manages approximately $1.9 billion in assets

Politicians Red and Blue love PEU.  The greed and leverage boys grew from preferred taxation and accessing Uncle Sam's wallet.  Wages and benefits stagnated as PEU's proliferated in the U.S.

The Biden cabinet is chock full of PEUs.  Pegasus joins Pine Island Capital in providing greedy executives to solve our nation's ills.  That's disturbing sign to this common person.

Update 5-17-22:  Gina McCarthy may step down and her potential replacement worked for a law firm that served the PEU boys.

Update 6-14-22:  Former PEU McCarthy wants social media to crackdown on people opposing green energy.

Wednesday, December 16, 2020

Buttigieg Named Transportation Nominee to PEU Cheers


Former South Bend, Indiana, Mayor Pete Buttigieg on Wednesday spoke to the historic nature of being named President-elect Joe Biden's transportation secretary nominee, and said he was "mindful that the eyes of history are on this appointment.

Presidential candidate Pete Buttigieg received over $82,000 in donations from The Blackstone Group, a private equity underwriter (PEU).  

Blackstone founder Stephen Schwarzman believes his firm will make huge profits off the current crisis, as the PEU did after Fall 2008.

“You always have winners and losers — Blackstone was a huge winner coming out of the global financial crisis, and I think something similar is going to happen,” he said.

He then discussed how his firm is generating big revenues today.

“About half of the firm’s earnings are from a real estate business. Just to give you some idea how this breaks, we pick the good neighborhoods, if you will. Real estate has a lot of different sub-asset classes. And we’ve concentrated in logistics. It’s about 36 percent of all the real estate we own,” he said. “We’re the largest owner of real estate in the private world. And that asset class has boomed with huge increases in rents, almost no occupancies, rent collections from almost everyone.”

Transportation nominee Buttigieg 

Biden added that he sees the Department of Transportation as the "site of some of our most ambitious plans to build back better" and that he trusts "Mayor Pete to lead this work with focus, decency, and a bold vision."

The role of transportation secretary is expected to play a central role in Biden's push for a bipartisan infrastructure package.

Politicians Red and Blue love PEU.  

Vice President elect Kamala Harris noted opportunities for PEU investment:

"We will transform our roads and bridges, transit systems, railways, ports and airports, while powering them with clean energy. Spark a renaissance in American passenger rail that will not only connect our country, but unlock job creation and growth across our manufacturing sector," Harris said. 
The vice president-elect continued, "And we will expand and upgrade our transportation system in a way that is equitable, serving communities of every size, urban and rural, across our country."
U.S. history shows how private profits can be made from public funds   Britannica noted:

Crédit Mobilier Scandal, in U.S. history, illegal manipulation of contracts by a construction and finance company associated with the building of the Union Pacific Railroad (1865–69); the incident established Crédit Mobilier of America as a symbol of post-Civil War corruption.

The key was how the transportation improvement was financed:

Crédit Mobilier was part of a complex arrangement whereby a few men contracted with themselves or assignees for the construction of the railroad. Along with certain trustees, the manipulators reaped enormous profits but impoverished the railroad in the process.  

It rings familiar.  The PEU way saddles affiliates with enormous debt burdens that can eventually sink the company.  Sponsors usually have pulled a multiple of their original investment from the affiliate by the time it declares insolvency.  

The projects remain to be seen but the PEU boys stand ready

Wednesday, December 9, 2020

Rare Black PE Executive Nominated for Defense Secretary


Yahoo Finance reported:

Apollo Global Management Inc. found that among 18,000 potential hires across the U.S., there were only about 95 Black professionals at the principal or director level.  Across all levels, the number was about 250.

That makes Defense Secretary nominee General Lloyd Austin a rare bird.  Austin is a partner with Pine Island Capital Management, a D.C. based private equity underwriter (PEU).

Pine Island imitated fellow D.C. based PEU The Carlyle Group by hiring a smattering of former politicians from both the Red and Blue teams.  Normally, one goes from Defense Secretary to a plum PEU position like Carlyle's Frank Carlucci.  

It's more rare for a Defense Secretary to come from the ranks of the greed and leverage boys.  It's even rarer for the Defense Chief and Secretary of State to come from the same PEU, Pine Island Capital.  What are the odds?

Update 12-26-21:  Tom's Dispatch lamented the litany of PEU generals like KKR's David Petraeus but missed Lloyd Austin's PEU pedigree.

Monday, December 7, 2020

Pine Island Capital Partners Gets Second Cabinet Nominee

What are the odds that a small Washington, D. C. based private equity underwriter would have two partners on President Elect Joe Biden's cabinet?  That very thing happened with the nomination of General Lloyd Austin for Defense Secretary.  Biden already nominated Antony Blinken for Secretary of State.  

Two of the top four cabinet slots are occupied by PEU boys.  Chief of Staff Ron Klain is a PEU.

The greed and leverage boys prioritized interest on debt over raises and benefit improvements for the last three decades.  The PEU class administered the raw deal so many American employees got while founders multiplied their billions.  

The combined wealth of U.S. billionaires surpassed $1 trillion in gains since March 2020 and the beginning of the pandemic, an increase of over 34 percent.

Politicians Red and Blue love PEU.   

Update 12-9-20:  Yahoo Finance noted the Pine Island Capital connection as well as Biden's appointment of several BlackRock executives to key positions in his administration.  A lot of Blue PEU love is going around..

Update 12-26-21:  Tom's Dispatch lamented the litany of PEU generals like KKR's David Petraeus but missed Lloyd Austin's PEU pedigree.

Wednesday, December 2, 2020

Carlyle Group to Profit from Ivermectin Run in India

The Carlyle Group's COVID-19 portfolio is laden with recent investments in Indian pharmaceutical companies.  SeQuent Pharmaceutical manufactures the drug Ivermectin, currently being use in India for the treatment and prevention of COVID-19.  Carlyle bought into SeQuent in May of this year. 

On September 28, 2020 NCBI reported:

According to government portal Clinical Trials Registry India (CTRI), ivermectin is part of at least five ongoing trials in the country [10]. At the latest, the US clinical trials registry has 38 clinical trials from different countries in different stages of completion [11]. Current clinical trials have used ivermectin in a dose ranging from 200 to 1200 mcg/kg body weight, for a duration of 3–7 days, which is showing promising results both in terms of symptomatology as well as viral load reduction [10].

Ivermectin is more cost effective as compared to hydroxychloroquine and azithromycin combination. The overall cost effectiveness, safety profile makes it more lucrative candidate for clinical trials. However, the safety of ivermectin at higher doses, in children less than 15 kg and pregnant women has insufficient evidence and hence is not recommended in these population groups [12]. With the fear of the disease among the population, herd mentality continues in India and social media is still dominated by how to take these drugs and inquiry about their doses continue among the crowd [13]. One such news of ICMR including ivermectin in treatment guidelines for COVID-19 circulated over the social media leading to a heavy over the counter sale of the drug in a short span. As a fact check the Indian Council of Medical Research (ICMR) is still reviewing the benefits of ivermectin and doxycycline as a potential therapy for COVID-19 and no such treatment guidelines is available on the website [14,15]. On April 10, 2020, FDA issued a statement concerning self-administration of ivermectin against COVID-19 referring to recently published in vitro study [4].

Economic Times India reported:

A government official said, "Many states, for example--Uttar Pradesh, are utilising the drug (Ivermectin) as off label for treatment purpose and also for prophylaxis use against Covid-19.  

Indian medical officials are yet to recommend Ivermectin for COVID-19 treatment.

Time of India reported in August:

Uttar Pradesh government has approved the use of Ivermectin as a new medication for the treatment and prevention of Covid-19. The drug will replace hydroxychloriquine.

TrialSiteNews reported:

Tata Main Hospital (TMH), established in 1908, has added the combination of Ivermectin and Doxycycline to its COVID-19 treatment protocol in addition to already adding Convalescent Plasma Therapy for the treatment of SARS-CoV-2 infected patients.

Carlyle is in the plasma business via its February purchase of MAK-SYSTEM, a blood products software company. 

The Carlyle Group plans to profit from the pandemic's shop from home craze.

Private equity firm Carlyle Group Inc said on Thursday it had invested more than $250 million in Pharmapacks, a U.S. e-commerce firm focused on health, personal care and beauty products.
The myriad of ways for Carlyle to profit from widespread COVID-19 include:

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).

Update 12-9-20:  The Carlyle Ivermectin run could be coming to the U.S. very soon. 

Update 3-28-22:  Carlyle's plan to flip Pharmapacks to an SPAC is falling through "due to market conditions."  SPAC deals are few and far between.

Update 4-21-24:  Bloomberg Law reported in September 2022 that Carlyle shuttered Pharmapacks and sold off its pieces.  I found this while searching for information on Carlyle's putting BeautyCounter into foreclosure and terminating its independent distributor network (brand advocates).