Sunday, December 26, 2021

Shafting Retirees: Major Telecom Edition

 

Thank heaven executives were spared from the cut!  The drive to the lowest common denominator on worker benefits only applies to the common man.  Executive compensation continues its rocket trajectory and retired executives get to hold their own.  

The incentive to retire is now an incentive to die by December 31st.  After that, a substantially reduced life insurance ($15,000) and death benefit ($25,000) for you, common retiree!  The wife will have to pay any uncovered funeral expenses.

And deal fees for the upcoming spinoff amount to ......?

Thursday, December 23, 2021

Carlyle Monetizes Ortho Clinical Diagnostics


Barron's
reported:

Healthcare diagnostics manufacturer Quidel reached an agreement to acquire Ortho Clinical Diagnostics Holdings for $24.68 a share of common stock in cash and newly issued shares in the combined company.  

Carlyle purchased Ortho Clinical Diagnostics in 2014.  It took the company public in 2021.  SEC filings indicate Carlyle held over 143 million shares in ODCX and a majority of board seats.  It also showed how private equity underwriters fee affiliates.

Management fees of $11.4 million over the last four years.

Management fees of $7.5 million for years 2022-2025

PEUs also churn affiliates.  Here's how Carlyle used Ortho to send business to its owned companies.:

Transactions with portfolio companies of funds affiliated with Carlyle

We have entered into agreements to sell products and provide services to Global Health Private Limited, Rede D’Or São Luiz S.A. and Pharmaceutical Product Development, Inc., health care diagnostic companies that are portfolio companies of funds affiliated with Carlyle. During the fiscal year ended January 3, 2021, we recognized revenues of approximately $1.1 million from Global Health Private Limited and approximately $2.7 million from Rede D’Or São Luiz S.A. For the fiscal year ended January 3, 2021, revenues recognized from Pharmaceutical Product Development, Inc were immaterial.

ProKarma Holdings Inc., Reval Holdings Inc. and Work & Co., portfolio companies of funds affiliated with Carlyle, have provided IT services to us. During the fiscal year ended January 3, 2021, we incurred IT service fees of approximately $0.4 million to ProKarma Holdings Inc. For the fiscal year ended January 3, 2021, we incurred IT service fees of approximately $0.4 million to Work & Co. For the fiscal year ended January 3, 2021, we incurred IT service fees of approximately $0.3 million to Reval Holdings Inc.

CFGI, a portfolio company of a fund that became affiliated with Carlyle in the fourth quarter of fiscal year 2017, provides consulting services to us. During the fiscal year ended January 3, 2021, we incurred consulting fees to CFGI of approximately $1.1 million.

WellDyneRx, LLC, a pharmacy benefit management organization affiliated with Carlyle, started to provide pharmacy services to us during the fiscal year ended January 3, 2021. During the fiscal year ended January 3, 2021, we incurred fees related to pharmacy services of approximately $5.7 million.
 

The Carlyle Group continues monetizing affiliates that benefited from the coronavirus.  It's latest sale involves COVID-19 testing. Quidel was the "first to market a rapid SARS-CoV-2 antigen test in the U.S."  Orho Clinical marketed "the first U.S. Food and Drug Administration-authorized high-volume antibody and antigen tests for COVID-19."

Quidel will acquire Ortho for $24.68 per share of common stock, for a total consideration of approximately $6.0 billion.

Sell at the top.  Buy when assets are distressed.  That's the PEU way.  Fed Chair Jay Powell, former Carlyle Group managing director, is in a unique position to give his former employer the next round of buying.  Until then, let the PEU profits flow!

Note:  One of Carlyle's Cayman Islands subs is doing the deal with Quidel, who's stock is tanking (down nearly $30 a share or almost 18%)

Update 12-28-21:  Ortho Clinical board member Thomas Mac Mahon gifted nearly 80,000 shares to three family trusts one week before the deal was announced.  Prior to the gift he held over 141,000 shares of OCDX.  As an Executive Partner for Flare Capital Mahon is well aware of tax avoidance tactics.  Not sure how he gets to do this while a public company is in negotiations for a sale.

Update 1-22-22:  Both Quidel and OCDX are down significantly post deal announcement.  The terms of the deal no longer total $24 per share.  It's now down to just over $18.

Tuesday, December 21, 2021

Carlyle Ready to Flip PurposeBuilt

 

Bloomberg reported:

Carlyle Group Inc. is nearing a deal to sell a roughly 49% stake in PurposeBuilt Brands, an owner of specialty cleaning and disinfection products, according to people with knowledge of the matter.  The transaction values the company at about $1.6 billion including debt.

Carlyle purchased the three components of PurposeBuilt for roughly $800 million a year before the coronavirus pandemic began.  COVID-19 increased demand for the company's products.  

Carlyle's buyout had financial impacts.  Interest expense increased from $1.8 million to $27.4 million per year.  Carlyle charged a $1.5 million management fee.  There were numerous transaction fees, totaling $34 million. 

Carlyle will have free shares in PurposeBuilt going forward, after flipping 49% of the company.  Private equity underwriters (PEU) preferred taxation remains firmly in place, no surprise given politicians Red and Blue love PEU, and many are one.

Sunday, December 19, 2021

Manchin Serves Billionaires

Blue Team Senator Joe Manchin of West Virginia serves a very small group, so small that none of them exist in his state.  Manchin protected U.S. billionaires from tax increases.  Consider the two billionaires name above.

Ken Langone founded Invemed Associates, an investment firm in 1974.  SEC filings indicate Invemed has stakes in at least two private equity underwriters (PEU), Centerview Capital and Thirteen Partners.

Centerview Capital shares the same graphic as Bob Rubin's Centerview Partners.  Rubin is a legendary member of the Blue Team that freed financial malfeasance.  Rubin's PEU advisory firm is helping The Carlyle Group, Blackstone and Hellman buy MedLine, a giant medical supply company.  This deal will not decrease healthcare costs.  It will add billions in deal fees, management fees, interest expenses and debt which may be mined for sponsor dividends.


Nelson Pelz founded Trian Capital, which brags of its private equity mindset.

Pelz speaks with Manchin on a weekly basis.  It's somehow fitting that Joe Manchin made his announcement on Fox News.  Politicians Red and Blue love PEU.  They are richly rewarded for their service to the greed and leverage boys.  

Update 12-21-21:  The billionaire boys are experiencing the "Manchin relief."  Wealth rewarded, yet again.   

Update 1-22-22:  "Weak taxation of the wealthy combined with anemic regulation of campaign fundraising have handed America's billionaires outsized political influence to go along with their huge economic clout."  U.S. billionaires dumped a staggering $1.2 billion into the 2020 elections—a 39-fold increase compared to 2010.  "In the 2010 election cycle, billionaires gave $19 million to Republicans and $11 million to Democrats," ATF noted. "By the 2020 cycle, those respective figures were $656 million and $539 million."  They expect a return on their political investment (ROI). 

Thursday, December 16, 2021

TPG IPO and Three Whorsemen


TPG plans to go public and submitted its initial S-1 filing.  The private equity underwriter (PEU) has been interested in a public listing and considered doing so by IPO or SPAC.  

The S-1 filing stated under Legal Matters (where it identified three law firms):

Some of the Weil, Gotshal & Manges LLP’s attorneys own interests in certain TPG funds. An investment vehicle comprised of attorneys of Davis Polk & Wardwell LLP owns interest in certain TPG funds. Ropes & Gray LLP and some of its attorneys are limited partners of RGIP, LP, which is an investor in certain TPG funds and sometimes a co-investor with such funds. RGIP, LP owns, directly or indirectly, less than 1% of any TPG fund or portfolio company through which it is directly or indirectly invested in such capacity. 

It's no surprise the legal profession would align with the greed and leverage boys.  PEUbiquitious.

PEU China Create Capital Fell from Grace Two Years Ago


Bloomberg
ran an odd story:

China Fortune Land Development Co. has “lost contact” with China Create Capital Ltd., a British Virgin Islands-registered firm to which it handed over $313 million in 2018 in hopes of receiving an annual return of 7%-10% through 2022, it said in a filing with the Shanghai bourse late on Wednesday.

Bloomberg did not include China Create Capital's fall from grace in 2019:

China Create has been headed by Zhang Wei, a former PLA officer who now stands accused, along with his employees and partners, of using blackmail, harassment and illegal firearms to help boost the returns on his private equity firm’s investments, according to a government notice.

China Create, branded by Shenzhen police as a “mafia-style gang”, allegedly lured in investors through an online fundraising platform, called “88 Wealth Network” which it started in 2013.

The peer-to-peer (P2P) lending platform listed fake or exaggerated investment projects to collect funds from the public and then loaned the money at illegally high interest rates. To help ensure their returns, the company is said to have threatened borrowers with detention, faked lawsuit documents and incited gang-like confrontations, the Shenzhen public security bureau in a notice dated on April 10.

Established in 2004, China Create owned stakes in at least 10 Hong Kong-listed companies valued at a combined HK$346.8 million (US$44 million) as of March 19, according to annual reports and exchange filings reported by Bloomberg.

Zhang Wei, a towering 46-year-old Heilongjiang native and other China Create executives are now understood to be held in undisclosed locations.

South China Morning Post reported:

The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country's financial system and capital markets.

Business Times reported:

A China Create representative said 100% of the company's assets are frozen under judicial order.

Zhang established China Create in 2004 and subsequently set up several subsidiaries, mainly operated under his and his partner Wang Tao's leadership. Their "financial" businesses were registered in categories of internet financing, wealth management, financing guarantee, small-scale loans, asset management and insurance broker.

There's a good reason Fortune Land lost contact with China Create's Zang Wei as he likely remains in prison.   Did any executives remain free to keep the company running?

The absence of the actual controller in office will not make a significant impact upon the company, a China Create representative said at the time Zhang was taken away for the police investigation.

The company reported a net loss of 1.2 billion yuan last year and in the first half of 2020, the operating revenues were down 13% to 717 million yuan. Zhang holds a 94% stake in the company.

None of the above makes sense.  How does a former Chinese Army official and security guard qualify to be a corporate controller?  Second, most 94% owners run the whole enterprise and chair the board.  They don't serve as controller.

The other odd aspect of the story is the role of a senior wealth manager that steered the money to China Create Capital, a Chinese private equity underwriter (PEU):

Fortune Land said one of its offshore units signed an agreement in 2018 to entrust a company called Wingskengo Ltd. to provide wealth management services for the developer, helping the latter buy fixed-income products.  As instructed by Wingskengo, Fortune Land transferred $313 million to China Create Capital for wealth management in 2018
The Chinese judicial system likely knows where Fortune Land's $313 million went.   PEU China Create had the money for a year before all of its assets were frozen.  Surely, Wingskengo kept track of the money until the government seized it in its crackdown on crime and corruption.  

China allowed U.S. based private equity underwriters so that it could learn the PEU model.  .They did so most excellently.

Tuesday, December 14, 2021

Former Labor Secretary Admits PEUs Control Congress


Former Labor Secretary Robert Reich said in his recent column on carried interest taxation:

The sole reason the loophole survives even during Democratic Congresses, is fierce lobbying by the private equity industry – and the dependence of too many Democrats on campaign funding from the partners of private equity and hedge funds.

President Bill Clinton opened the door to the greed and leverage boys and welcomed them to Uncle Sam's wallet.  Every White House since has catered to private equity founders.  Politicians Red and Blue love PEU.  

During the 2020 election, Biden’s presidential campaign received over $3,000,000 from people working in private equity and related types of investment funds.
Reich knows where President Joe Biden spent Thanksgiving, at the Nantucket estate owned by billionaire founder of The Carlyle Group David Rubenstein.  Biden has stayed there numerous times.

Rubenstein has direct access to the White House and Capital Hill.  No, he's not a registered lobbyist.  He doesn't have to register his high powered influence peddling.

Reich noted the failure to address the carried interest problem during President Barack Obama's first term.

In 2010, House Democrats squeaked through a tax plan that closed the loophole, but Democrats who controlled Senate wouldn’t go along.

Surely, Robert Reich has heard the infamous story of how Rubenstein saved preferred carried interest taxation for private equity underwriters (PEU).  One version of the story highlighted David Rubenstein's influence:

On June 8, 2010 Rubenstein’s cell phone rang as he was speaking to supporters of the Economic Club, at the Phillips Collection. He left the stage to take the call. Among those in the audience was Gary Shapiro, the consumer-electronics lobbyist who was Rubenstein’s travel companion to Japan in the ’80s. After a few minutes, Shapiro recalls, Rubenstein returned and said, “That was a senator. That one call just saved us on carried interest.”

PEU Blue Team members include Senators Joe Manchin and Krysten Sinema.  How many times do they have to visit the White House to discuss the Biden agenda?  Has David Rubenstein joined them in person or by Zoom?  That would not surprise me at all.  

The public gets strung along while elected officials serve billionaire policy makers.  It's a multi-decade event.

Update 12-15-21:  Robert Reich had to go to England to speak his mind.  Europe stands ready to make it easier for the common person to invest in private equity.  

...leading buyout firms including Blackstone Inc. and Apollo Global Management Inc. plan to target individual investors as a fresh source of fee-paying capital. Blackstone said it wants half of new client money to come from individuals.

Update 1-22-22:  "Weak taxation of the wealthy combined with anemic regulation of campaign fundraising have handed America's billionaires outsized political influence to go along with their huge economic clout."  U.S. billionaires dumped a staggering $1.2 billion into the 2020 elections—a 39-fold increase compared to 2010.  "In the 2010 election cycle, billionaires gave $19 million to Republicans and $11 million to Democrats," ATF noted. "By the 2020 cycle, those respective figures were $656 million and $539 million."  They expect a return on their political investment (ROI).  

Update 2-13-22:  Reich's latest column omitted the Blue Team's role in building American oligarch's.  Bill Clinton and Barack Obama did their part to grow PEU wealth at the expense of the worker.

Sunday, December 12, 2021

Youngkin's Series of Head Spinning Firsts


Virginia's Governor elect Glenn Youngkin served as Co-CEO for The Carlyle Group from late 2017 to September 2020.  He served as Chief Operating Officer and member of the Executive and Operating Committees prior to his appointment.  Under Glenn's leadership Carlyle became the "first major private equity firm to make a carbon neutrality commitment in 2017."

Youngkin is on video highlighting his ESG bona vides in May 2020.  Yet he has made clear his intention to pull Virginia out of the Regional Greenhouse Gas Initiative (RGGI).

RGGI is the "first market-based, cap-and-invest regional initiative in the United States."  That sounds exactly like something Youngkin would've supported at Carlyle.  

Companies can also significantly reduce their Scopes 1 and 2 greenhouse gas (GHG) emissions while driving cost savings by developing a focused energy procurement strategy.--Carlyle Impact 2021

Consider Carlyle's approach to better business and climate resilience:

Climate change is one of the most pressing issues of our time, creating unprecedented risks and opportunities for businesses across all industries. Companies that can navigate these emerging challenges – from physical risks to policy shifts and technological disruptions – and seize the mounting opportunities of the energy transition, we expect will have the climate resilience to thrive in a changing world.

Youngkin's longtime employer has a greenhouse gas private equity offering:

As a core pillar of our firmwide strategy on climate change, we launched our Renewable and Sustainable Energy Fund (RSEF) to capture the opportunities created by the energy transition and commit to invest globally in the renewable and sustainable resources sector.--Carlyle Impact 2021

We modeled out investment implications under different carbon-pricing scenarios. We also incorporated improved monitoring of greenhouse gas emissions and a more robust approach to reducing those emissions over our hold period as part of our investment thesis, as we believe this would position us for a stronger exit.--Carlyle Taskforce om Climate Related Financial Disclosures Report 2020.

Achieved our third year of carbon neutrality across our 32 global offices and the activities of our more than 1,750 employees, after we became the first major private equity firm to make a carbon neutrality commitment in 2017.--Carlyle Taskforce om Climate Related Financial Disclosures Report 2020.

Youngkin won't be the first politician for flip-flop on an issue.  Citizens just need to forget his twenty five year career at Carlyle, a politically connected private equity underwriter (PEU).  It's Youngkin's turn to steer Virginia's state budget toward the greed and leverage boys.

Polticians Red and Blue love PEU and some are one.

Update 3-5-22:   PEU Youngkin wants the "E for equity" removed from Virginia government.  Does that make him a PU Governor?

The crusade against equity strikes Del. Don L. Scott Jr. (D-Portsmouth) as especially confounding because Youngkin took such a different tone when he led the Carlyle Group. Youngkin and co-CEO Kewsong Lee hired a chief diversity officer and put out a strongly worded statement condemning “racism and injustices” in the aftermath of George Floyd’s murder by Minnesota police in 2020.

Update 6-17-22:  WaPo found Youngkin's diversity roots.   Apparently they were just shallow roots for his PEU image.

Youngkin was recognized for diversity practices when he was co-chief executive of the Carlyle Group private equity firm, but has adopted a far more hard-line stance since running for office last year.

Update 8-14-22:  A pension fund lawsuit names individual Carlyle executives, including Glenn Youngkin for unjust enrichment at the expense of Pittsburgh first responders.

The 136-page lawsuit alleges that Youngkin received about $8.5 million of a $344 million payday engineered for a small group of top executives in 2019 and 2020, when he served as co-CEO.The executives “were unjustly enriched at the expense of and to the detriment of Carlyle and its stockholders,” according to the suit.


 

Tuesday, December 7, 2021

PEUs Invade Democratic Investing

MarketWatch reported:

Vanguard built its reputation on democratizing investing, bringing institutional products to the masses and doing so cheaply. Its retail-investor-friendly moves – index funds and low fees — have endeared it to millions of investors.

But the asset manager’s recent push into private-equity markets is giving some fans pause.

The $7 trillion asset manager began providing institutional clients – pension funds, endowments and the like – access to private-equity investments in 2020 through HarbourVest Partners, an $85 billion, independent global private markets investment firm. It expanded into wealthier individuals earlier this year.

Some advisers think Vanguard’s entry into private equity underscores that the firm is no longer the firm founded by Jack Bogle in 1975.

“I suspect [Bogle] will roll over in his grave.” 

The greed and leverage boys overran our democracy.  Now they've invaded democratic investing. 

Politicians Red and Blue love PEU.  Vanguard wants in on that high fee love. I doubt the PEU boys share.

Monday, December 6, 2021

Dimon's Nose for Leadership

Jamie Dimon, chairman and CEO of JPMorgan Chase, stated the most successful leaders have certain key traits.  Dimon said:

[H]umility, openness, fairness [and] being authentic” are most important – “not [being] the smartest person in the room or the hardest working person in the room.”...  Having these traits also increases your productivity, along with your success, Dimon said.

Success, as in promoted?  That's patently laughable.  Those very characteristics got people fired as executive and investor greed hollowed out our economy.  

I've seen many honest, ethical leaders targeted for elimination after contacting corporate compliance departments with authentic concerns.  They were open and quickly shuffled out the door.

WSJ reported:

A former JPMorgan Chase & Co. compliance executive has sued the bank for retaliation, saying it fired her after she pointed out gaps in its anticorruption controls and raised concerns about what she believed were misrepresentations to regulators.

Added to that, Dimon eschewed his assessment with a statement:

“No one would say Jamie Dimon is humble,” he said in July.
Jamie Dimon didn't have the guts to say the real rules.  Former Treasury Chief Larry Summers explained in 2009:

"I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders."--Larry Summers, Ph.D.

Political and personal connections are what gets people hired in Larry Summers economy.  Take today's news:

Rep. Devin Nunes, R-Calif., will resign from Congress to become chief executive officer of former President Donald Trump’s fledgling social media company next month, the group said Monday.

Nunes will begin his new career despite having no apparent prior experience working in the tech industry or as an executive.

Insider sponsorship will get some people extremely wealthy in our PEU world.  Qualifications do not matter.  

Blind follower-ship is required in America's Government Corporate Monstrosity where the successful dance in and out of public service, eventually garnering a king's ransom from a smattering of what would seem to be full-time positions.

The people they "serve" are the moneyed class.  Consider one such member.

U.S. hedge fund billionaire and philanthropist Michael Steinhardt has surrendered $70 million of stolen antiquities and accepted a first-of-its-kind lifetime ban on acquiring antiquities to resolve a criminal probe.  The probe, begun in February 2017, found "compelling evidence" that the 180 antiquities were stolen from 11 countries, with at least 171 passing through traffickers before Steinhardt's purchases.

How would you fare if you were found in possession of stolen antiquities?   Not so well.  But there's more.

Over the course of more than 20 years, Michael Steinhardt repeatedly requested sex or sexual favors from female nonprofit workers who were relying on or seeking his financial support, and frequently made comments to women about their bodies and fertility.Steinhardt, a New York billionaire and hedge fund manager, is a major philanthropic figure. 

There's no humility, just a selfish desire to possess more and more

PEUs in DWAC PIPE?


Did any private equity underwriters (PEU) put their investor money in Donald Trump's Truth Social via DWAC's $1 billion PIPE (private investment in public equity)?  Blackstone's Stephen Schwarzman served as a close Trump advisor.  Carlyle Group co-founder David Rubenstein rues not putting money into Facebook.  

The greed and leverage boys have long paid for close political access.  However, Donald Trump's penchant for bankruptcy could restrain those charged with making investor returns.  

Could PEU investors find value in Truth Social?  They could combine their tendency to reduce headcount with Trump's signature line, "You're fired!"  Rather than Zoom and e-mail employees being fired before Christmas, the PEU boys could Truth Social them away from gainful employment.  Look for that functionality if the greed and leverage boys are all in.

Update:  Rep. Devin Nunes (Red Team-CA) will resign his House seat to take the reigns of Trump Media and Technology Group.

Update 12-10-12:  Former President Donald Trump lashed out with profanity at Benjamin Netanyahu for congratulating President Joe Biden on his victory in the U.S. election, an Israeli newspaper reported Friday.  Trump said "F—- him" in reference to Netanyahu. 

Update 8-15-22:  DWAC needs an extra 12 months to close on Trump's Truth Social.

Sunday, December 5, 2021

Carlyle Group Admiral on CNN's GPS


I noticed a Carlyle Group executive on Sunday morning news program Fareed Zacharia's GPS.  Zacharia spoke with Admiral James Stavridis about Russia's possible invasion of Ukraine.  There was no mention of Stavidris' Carlyle connections or feedback from the people of Afghanistan, Libya or Syria on the success of the Admiral's actions in their countries.

As no one declares conflicts of interest these days I researched ways Stavridis is currently profiting from America's government-corporate monstrosity. 

Stavridis is a private equity underwriter (PEU) for The Carlyle Group, Whitefield Capital and DC Capital (Board of Advisors).  

DC Capital appears to be the Red Team's PEU.  It is similar to the Blue Team's Pine Island Capital which produced President Biden's top two cabinet members, Anthony Blinken and General Lloyd Austin.

Admiral Stavridis is also a director for a number of Neuberger Berman investment funds.  Neuberger's website states the company "manages a range of equity, fixed income, private equity and hedge fund strategies."


Stavridis sits on the board of Fortinet and American Water Works.  Fortinet pays him $55,000 a year and gave him $245,000 in restricted stock.   American Water Works paid the Admiral nearly $240,000 in director compensation in 2020.  He currently holds 3.000 shares of American Water Works stock, valued at over $500,000.  His board bio revealed more directorships.


McLarty is another familiar Carlyle Group name.  T.F. "Mac" McLarty was President Bill Clinton's Chief of Staff.  McLarty Associates is a PEU affiliate of Madison Dearborn Partners and will soon be part-owned by HPS Investment Partners, another PEU..

Michael Baker International is an affiliate of DC Capital.  It is part of DC Capital's first fund.

White Field Capital's website described the firm as "a U.S. based private equity firm with offices in Charlotte and Puerto Rico. We are focused on investing and partnering with growing businesses valued at up to $20 million."

Vigor/MHI Shipyard is a Carlyle investment alongside Stellex Capital.  They combined assets in 2019.

Private equity companies The Carlyle Group and Stellex Capital Management have agreed to merge two American shipyard firms, Oregon-based Vigor Industrial and Norfolk-based MHI Holdings.

Might there be a naval component to any conflict between Ukraine and Russia?  What if the U.S. enters the fray?  The United States has a naval presence in the Black Sea.

Fareed has a history of going easy on Carlyle Group executives and missed Bono's PEU connections.  

Stavridis clearly qualifies as a greed and leverage boy, one with considerable political influence and a track record of widespread human misery in at least three countries.  Will it become four?

Update 12-7-21:  The Admiral was back on CNN tonight.  

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 in their piece.  No mention of Carlyle's James Stavridis.

Saturday, December 4, 2021

Carlyle Group Expands COVID Portfolio with CNSI

The Carlyle Group added to its extensive COVID-19 portfolio with its planned buyout of healthcare IT provider CNSI.  

CNSI operates at the unique intersection of technology, healthcare and government services, and we see significant growth opportunities ahead as the company leverages its unique capabilities and continues to develop market-leading solutions.”

The deal is expected to close this month.  Washington, D.C. based Carlyle has long sought companies that tap Uncle Sam's wallet. 

Carlyle's presence in China tipped the PEU off to COVID-19's massive profit opportunity.  The private equity underwriter (PEU) began growing its COVID-19 portfolio in February 2020. 

Prior to India's devastating COVID surge Carlyle invested in a drug manufacturer that produced Ivermectin.   McLean, Virginia based CNSI has a presence in India as well:

Headquartered in the United States with a major technology center in Chennai, India, CNSI employs a world-class team.

India experienced nearly 500,000 COVID deaths to date.  

In August 2020 WSJ reported:

(Carlyle Group co-founder) David Rubenstein has been ruminating about death lately. “Covid has made me realize my own mortality,” says the 71-year-old billionaire co-executive chairman of the Carlyle Group Inc., a private-equity firm he co-founded in Washington in 1987. “You kind of say, ‘How come 170,000 people have died and I haven’t?’” 
U.S. COVID deaths passed 808,000.  Were some of Rubenstein's ruminations on how to profit from widespread disease and death?  Highly likely.

In March 2020 Carlyle Group co-founder David Rubenstein's family office invested in COVID test maker Vault.  Uncle Sam is spending big money on COVID home tests. 

Rubenstein interviewed Dr. Anthony Fauci via Duke University's Global Health Institute in February 2021.

Rubenstein:  Will we have access to home COVID-19 screening tests any time soon?

Fauci:  The U.S. government has contracted with a company that makes a rapid point-of-care, sensitive and specific home test that people will soon be able to obtain at a pharmacy and you can use it to test yourself any time you want.  

There was no declaration of a possible conflict of interest in the interview.  Rubenstein owned Vault offers in home COVID testing:

Vault serves the following states; Idaho, Minnesota, West Virginia, New Mexico and Delaware. 

 

President Biden's home state is Delaware and he recently spent Thanksgiving at the Nantucket estate of David Rubenstein.  It's a small world for policy making billionaires.

The other ways The Carlyle Group can profit from COVID-19 include:

  • infrared screen people in airports for 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) 
  • make federal coronavirus purchasing something other than a Jared Kushner clown show (Unison)

The greed and leverage boys will make big money on COVID.  It's the way our world works.  Politicians Red and Blue love PEU.

Update 6-13-22:  CNSI has a new board stacked with Carlyle executives.  It also has the former Deputy Director for Medicare/Medicaid and chair of MACPAC.  Carlyle has long used former government insiders for profit purposes.

Thursday, December 2, 2021

Rubenstein's Paxos to Testify before Congress on Crypto


The Block Crypto reported:

The House Financial Services Committee will host a hearing titled "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States."

The witnesses are CEOs from leading crypto firms: Circle's Jeremy Allaire, FTX's Sam Bankman-Fried, Bitfury's Brian Brooks, Paxos' Chad Cascarilla, Stellar's Denelle Dixon and Coinbase's Alesia Haas.

Carlyle Group co-founder David Rubenstein personally invested in Paxos via his family office, Declaration Partners.  As host of a Bloomberg podcast Rubenstein remains bullish on cryptocurrencies while some of his guests call them "eventually worthless." 

Politicians Red and Blue take phone calls from David Rubenstein.  This is the same David Rubenstein that hosted President Joe Biden at his Nantucket estate for the fourth or fifth time.  Biden said he paid Rubenstein for the use of his billionaire retreat.  Did he use Paxos as an intermediary?  

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.

Saturday, November 27, 2021

Youngkin's Transition Team Has PEU Odor

The head of Virginia Governor Elect Glenn Youngkin's transition team is a private equity underwriter (PEU).  Jeff Goettman founded CameronBlue Capital, a private equity firm in 2006. Previously, Mr. Goettman was a Managing Member at Thayer Capital Partners, a Washington, D.C. based private equity firm.  Thayer Capital supports the political Red Team.


Glenn Youngkin's Carlyle Group sent U.S. auto part manufacturing jobs to China during its ownership of United Components, Inc.  A former Thayer Capital Partners affiliate, Qualitor, sees China as a ripe market for automotive aftermarket products.


I.m sure Jeff Goettman understands why Glenn Youngkin backed out on Carlyle's lead developer role for public-private partnership project Harbor Island.  The Carlyle Group's abandonment put the Port of Corpus Christi in a $400 million bind.

Devin O'Malley, the man who helped Youngkin avoid his actual record, got hired by Narrative Strategies.  O'Malley once worked for Trump's disastrous,, conflict dominated Coronavirus Task Force.  Bleach can't remove that stain.  This team's job is to divert the public's attention elsewhere.  Racy library books anyone?

Thursday, November 25, 2021

Biden Thankful for House of Greed


U.S. President Joe Biden is spending Thanksgiving at the Nantucket home of Carlyle Group co-founder David Rubenstein.  This will be at least the third time he has done so.  The first occurred in 2014, then 2016 and now 2021.  There is a chance Biden stayed there in 2019.

Multi-billionaire Rubenstein is the man who repeatedly saved private equity's preferred carried interest taxation and may benefit from the Blue Team tax cut for the wealthy.  On how many homes can David Rubenstein claim the state and local tax deduction?  

Carlyle's Rubenstein is reportedly in Europe and not with Biden for his Thanksgiving trip.  

Rubenstein has reportedly boasted to friends that he only spends 12 days a year at the Nantucket estate. 

Ultrarich Rubenstein would much rather pay interest than taxes.  Here's his latest take on taxes.

‘If you tax the upper income, there aren’t enough of those people to really make a wealth distribution effect that’s going to be significant. There just aren’t enough highly wealthy people.
It's remarkably consistent with his stand over a decade ago.  This is from a major business reporter (Summer 2011):
I have seen so many people -- particularly those in their 50s - 70s -- taken apart by what has happened in their industry as greed has hollowed out the economy. These are people took pride in their jobs and held themselves to this invisible standard that we all just took for granted, but is being wiped out.

The Carlyle Group scares me more than anything I've ever seen on Wall Street. It seems to exist to corrupt politicians and it's hard to know who they even represent.

I watched a video interview of (David) Rubenstein and his arrogance is really beyond tolerance. He was going on about the debt ceiling problem and how there would need to be cuts in services and higher taxes. When the reporter asked him about tax on carried interest he turned really disdainful and said that this "only" amounted to $22 billion over some number of years and this was not serious money. Boy, nothing like everybody doing their small part to save the country from oblivion!

History is why Biden's staying at the Carlyle Compound is disconcerting.   

Update 11-26-21:  The Carlyle Group's most recent lobbying report indicates its desire to keep PEU preferred carried interest taxation, garner a chunk of all of the Blue Team's spending bills and further Carlyle's COVID-19 profit plans.  Billionaire PEU founders can pick up the phone and call the occupant of the White House.  Both Red and Blue Presidents answer the phone for non-lobbyist David Rubenstein.

Update 1-14-22:  After bailing as lead developer for the Port of Corpus Christi's Harbor Island Carlyle plans to start a new infrastructure offering.  Time to mine more of Uncle Sam's wallet?

Wednesday, November 24, 2021

Youngkin Cannot Disparge Carlyle Group until September 2025


Virginia's Governor Elect for the Red Team Glenn Youngkin will be sworn into office on January 15, 2022.  The former Co-CEO for The Carlyle Group, a politically connected private equity underwriter (PEU), left Carlyle in September 2020.  His employment agreement with Carlyle has a Non-Disparagement Clause that runs for five years after separation.  It states:

Employer and Employee covenant and agree that, both during Employee’s employment with Employer and for a period of five years after the Termination Date, (i) Employee shall not disparage Carlyle, the Founders and Carlyle’s employees, directors or businesses or members of Carlyle’s Executive and Management Committees and (ii) Carlyle shall not authorize, and the Founders and Carlyle’s directors and members of Carlyle’s Executive and Management Committees shall not make, disparaging remarks about Employee. The previous sentence shall not apply, however, in the case of any statement that is made (x) in testimony pursuant to a court order, subpoena or legal process or (y) to a court, mediator, government agency or arbitrator in connection with any litigation or dispute between Employer and Employee.

As Carlyle Co-CEO Youngkin headed the firm's infrastructure efforts.  The Carlyle Group abandoned its lead developer role for deep-water oil terminal expansion for the Port of Corpus Christi, known as Harbor Island.  Glenn Youngkin's abdication left a roughly $400 million hole in that public-private partnership.  

Texas officials long looked the other way regarding Carlyle.  In 2004 Texas Governor Rick Perry provided $35 million to Carlyle affiliate Vought Aircraft Aviation for 3,000 jobs.  Come 2010 Carlyle cut 35 positions in the Dallas-Fort Worth area, garnering $1 million per job eliminated.

Youngkin and Carlyle's executive team chose not to pay back Texas taxpayers when they flipped Vought. for $1.44 billion

The Carlyle Group bid on Virginia Ports operations in 2012.   It later withdrew their proposal. 

The firm told officials it's no longer interested in pursuing a long-term lease of the Virginia Port Authority's terminals.
That ended prior to Carlyle inking a lead developer role.  Youngkin has been on the abandonment side of at least one public-private partnership and faced no public scrutiny. 

Virginia voters have a right to expect Glenn Youngkin not to have any restrictive clauses impeding his job as Virginia's Governor.   That his loyalty to Carlyle could stand above his oath to Virginians is cause for concern.

Update 11-26-21:  The head of Youngkin's transition team is a PEU.  Jeff Goettman founded CameronBlue Capital, a private equity firm in 2006. Previously, Mr. Goettman was a Managing Member at Thayer Capital Partners, a Washington, D.C. based private equity firm.  

The man who helped Youngkin avoid his actual record got hired by Narrative Strategies.  He once worked for Trump's disastrous Coronavirus Task Force.

Also, a Youngkin spokesperson confirmed transition officials have been asked to sign nondisclosure agreements.  Is there also a non-disparagement clause?

Tuesday, November 23, 2021

Powell's Renomination Good for PEU Boys


Fortune
reported how Fed Chair Jerome Powell's policies boosted his former private equity employers.  The article stated:

Powell spent years as a private equity dealmaker, creating and selling the kinds of debt instruments that he later bailed out as Fed chairman. Powell’s radical actions to pump more money into markets, credited by many with keeping the economy afloat throughout the pandemic, have also greatly benefited his former peers in the private equity business. To be clear, there is no indication that Powell has taken any actions at the Fed to directly enrich himself or his former employers. But Powell’s career illuminates the deeper realities about the Federal Reserve and the American economy. The Fed’s policies are not just the realm of technocrat PhD economists who are solving math equations. The Fed is enacting programs that create winners and losers. And the winners, time and again, are people like Jay Powell and the investment firms that made him rich.

It's hard to throw a rock in political circles and not hit a private equity underwriter (PEU).  The greed and leverage boys have infected America's citadels of power and steer policy/budgets that profits their own.

In the early 2000s, Powell was a partner at the Carlyle Group, a private equity firm that specialized in hiring former government officials and cashing in on their connections. At Carlyle, Powell learned firsthand about the debt-driven business model of the private equity business, which delivered hundreds of millions of dollars of profit to senior partners while saddling the companies they bought and sold with debt and downsizing. As it happened, this is exactly the kind of economic activity that the Fed has been relentlessly encouraging over the past decade. Many years of easy money policies have been rocket fuel for private equity firms like Carlyle Group because cheap debt is their lifeblood. It funds their ambitious takeover plans and even funds their paychecks directly.

The article highlighted Jay Powell's role in flipping Carlyle affiliate Rexnord for a king's ransom.

Under Carlyle’s investment rules, 80% of the profits would have gone to the limited partner investors who put up money for the buyouts and 20% to Carlyle, according to one person familiar with Carlyle’s operations. Of the Carlyle money, 45% went to the corporate “mothership,” as they called it, and 55% would go to Jay Powell’s team. Government disclosure forms from 2018 indicate that Powell’s personal wealth was worth between $20 million and $55 million by 2018.

Powell left Carlyle after his huge payday.  Rexnard would be crippled by the massive debt loaded onto its balance sheet.  Powell started Severn Capital Partners and worked for PEU Global Environment Fund.

Dallas Fed Chair Richard Fisher called out Powell's subsidies to his PEU peers.

Quantitative easing “has, I believe, had a wealth effect, but principally for the rich and the quick—the Buffetts, the KKRs, the Carlyles, the Goldman Sachses, the Powells, maybe the Fishers—those who can borrow money for nothing and drive bonds and stocks and property higher in price, and profit goes to their pocket,” Fisher said during one meeting. He argued that this would not create jobs, or boost wages, to nearly the degree the Fed hoped it would.

Virginians just elected a governor who exported jobs to China.  Rexnord did likewise under PEU ownership"

All this corporate debt didn’t benefit Rexnord employees like John Feltner who worked at the company’s ball-bearing plant in Indianapolis. As it labored under so much debt, Rexnord looked for ways to cut costs. In 2016, Rexnord announced that it was shuttering the plant where Feltner worked and sending the production to a new facility in Mexico, cutting 350 jobs in the United States.

The Fed instituted numerous new programs during the 2020 pandemic shutdown, saving countless private equity affiliates.

This bailout didn’t just save the corporate debt market. It fueled it. By the end of 2020, companies issued more than $1.9 trillion in new corporate debt, beating the previous record that was set in 2017. The cheap debt has helped deliver record profits to private equity firms like Carlyle Group. In late October, Carlyle reported a record $14 billion in asset sales for the third quarter of the year, helping it pay $730.6 million in earnings to its shareholders, also a record. Carlyle’s stock price has jumped about 86% since the beginning of the year.

The greed and leverage boys know Powell has their back.  

It remains to be seen how stable corporate debt markets once the Fed eases the pressure to search for yield. But private equity firms, hedge funds and Wall Street speculators can take one lesson from the past few years: Jay Powell will be there for them.  

PEU Powell is worthy of a Biden cabinet position or renomination as Fed Chair.

Update 6-10-22:  Insider Larry Summers said “The Fed’s forecasts from March, saying that inflation would be coming down to the 2s by the end of the year was, frankly, delusional when issued, and looks even more ridiculous today.”  Inflation was a hot 8.6% for May.  Summers urged the Fed to investigate why officials’ forecasts were “so dramatically” and repeatedly wrong.

Wednesday, November 17, 2021

Red Team Senator Scott Cheers Inflation

Red Team leaders have a strange way of supporting Americans struggling financially.

We're going to continue to have inflation, and then interest rates will go up," Sen. Rick Scott of Florida, the head of the Senate GOP's fundraising arm.  "This is a gold mine for us," he said.

Scott already owns a personal gold mine with nearly $260 million in net assets and can easily withstand inflation.  The common citizen does not have his resources and should be concerned about the Senator's celebration of economic distress.

Here's Rick Scott's historical contribution to healthcare inflation:

When family practice physician Randy Prokes joined Solantic Urgent Care in 2004, he told state investigators, his Neptune Beach clinic brought in just $2,000 a day.

By the time he was fired from that job nearly six years later, Prokes said, that same clinic had quadrupled revenues to about $8,000 a day, reaping profit margins unheard of at most doctors' offices.

Rick Scott founded Solantic in 2001 and sold the chain of medical clinics to PEU Welsh, Carson, Anderson and Stowe in 2011.   The 300% increase in revenue occurred under Scott's ownership and contributed to healthcare inflation, long a sore spot for the common person.

Update 12-3-21: "Mitch McConnell has told colleagues and donors Senate Republicans won't release a legislative agenda before next year's midterms."  The Red team will complain about inflation without coming up with a plan to address it should they get a Congressional majority.

Tuesday, November 16, 2021

Youngkin Shafted Texas Taxpayers


Virginia's Governor elect Glenn Youngkin has a bad track record in Texas.  He headed The Carlyle Group's infrastructure efforts.  Carlyle backed out of its lead developer role for the Port of Corpus Christi;s Harbor Island expansion.  That 2019 move left a potential $400 million hole for the public-private partnership. 

It wasn't the first time The Carlyle Group failed to meet its Texas commitments.  Carlyle's 2009 Annual Report stated:

"in March 2010, Carlyle agreed to sell Vought to aircraft components maker Triumph Group in a transaction worth $1.44 billion.  

Carlyle's executive leadership decided not to refund Texas taxpayers a mere $35 million out of that nearly $1.5 billion proceeds for failures to meet Vought's promised jobs target.  The executives included:

 The three founders are joined by Daniel F. Akerson and Glenn A. Youngkin on the firm’s executive committee.  

The operating committee is led by seven seasoned Carlyle professionals: Glenn A. Youngkin, Chair; Jeffrey W. Ferguson; David M.Marchick; Peter H. Nachtwey; Michael J. Petrick; Bruce E. Rosenblum; and Gregory L. Summe."  

The name on both groups is the newly elected Governor of Virginia representing the Red Team, Glenn Youngkin..

Youngkin helped short Texas taxpayers as Carlyle kept $35 million over six years.  Not only did it not come close to their employment promises, they cut 35 jobs during that period.  Glenn and Carlyle received $1 million from taxpayers for each Texas Vought job they cut during the performance period.

The average citizen doesn't get to keep $35 million over six years for completely failing to meet an incentive.   Carlyle knew it would not add promised Texas jobs in 2006.  That was four years before it faced the prospect of making minimal repayment.  

Why does this matter?  Youngkin will be in a position to push public-private partnerships and jobs incentives as Virginia Governor.  He has a bad track record in both areas.

Update 7-16-22:  American University and just hired former Carlyle Group Managing Director David Marchick as Dean of AU's business school. Do they have a course on milking state economic development funds?

Monday, November 15, 2021

PEU Declares "Death Knell" of Corporate Conglomerates

Seeking Alpha reported financial sharks surround GE as it breaks into multiple companies.   Private equity underwriters (PEU) are interested in GE's financial assets, airplane leasing, power generation and long term healthcare insurance.

"This is epochal," a P-E partner tells FT, calling GE's break-up the "death knell" of the conglomerate business strategy.

The greed and leverage boys love disintegration.  They created the conditions that contributed to political division, now fully dysfunctional.  Decades of exporting U.S. jobs, reducing headcount, giving zero to minimal raises gave many citizens a tough hand.  

Red and Blue political parties strive to steer the decades-long, crap economic sandwich into support for their candidates, many of them PEUs.  Yes, the very people that sent local jobs overseas, reduced staffing/benefits and touted business policies the very opposite of their political party are the answer to a disaffected public.  The media noted none of that for former Carlyle Group CEO Glenn Youngkin in his race for Virginia Governor (Red Team).  NBC News highlighted:

..given Youngkin's polished brand, financial background and unwillingness to fully embrace the former president.

The Blue Team couldn't point out Carlyle's failings under Youngkin's ownership as their candidate invested in Carlyle's private equity offerings.  Virginians had to choose from a PEU executive or a PEU limited partner.  

Serving policy making billionaires is U.S. political constant, a north star for both parties.  Politicians Red and Blue love PEU and many are one.   With their outsized riches inflation does not impact them in the least.  However it is the latest level of pain citizens have experienced from those in charge.

Disintegration and greed for money and power are all our political/business leaders have to give us.  For that we suffer.

"Voters need to see us as normal. Just normal people."

Then give us some.   Maybe that will come when society and businesses start integrating again.

Sunday, November 14, 2021

Government Ethics Expert Walter Shaub Learned from Reds and Blues


Government ethics chief Walter Shaub served nearly twenty years before retiring.  He headed the Government Ethics Division for Presidents Obama and Trump.  Shaub weighed in on Trump's use of the White House as a personal enrichment vehicle.  More recently he chastised the Biden administration for kid gloving Hunter Biden's $500,000 per piece art sales.

A telling situation occurred while Shaub served a top lawyer in the Ethics Department.  CBS News reported:

Huma Abedin, a longtime aide to former Secretary of State Hillary Clinton, worked for a little under a year as a "special government employee" for the State Department. During that period in 2012, she was also working as a consultant for a private firm called Teneo, giving private investors information about the government.  

Ms. Abedin earned approximately $135,000 from the State Department while receiving $355,000 in consulting income for representing outside clients, as she remained a Federal employee and a trusted advisor to Secretary Clinton

Teneo promotes the company as "the global CEO advisory firm."  It's roots included former President Bill Clinton and British Prime Minister Tony Blair.  FT reported:

Teneo’s growth was also fueled by private equity and plenty of debt.  In 2019, a leaked email showed the then head of Teneo’s UK operation reprimanding staff for behaving like “a bunch of clubbing teens”.

Teneo bought multiple restructuring firms after private equity underwriter (PEU) CVC Capital acquired a majority stake. 

They snapped up smaller PR firms such as London’s Blue Rubicon and StockWell, and announced an investment this March in WestExec, the geopolitical risk consultancy co-founded by Michèle Flournoy, a former senior Pentagon official. 

This year, CVC put in another $100m to help Teneo acquire Deloitte’s UK restructuring business, a $279m deal that will bring Teneo’s revenues close to $400m and leave its debt at more than six times its earnings before interest, tax, depreciation and amortisation, according to Moody’s.

Biden Secretary of State Anthony Blinken co-founded WestExec.  How much did he profit from the Teneo investment?  Obama's Health Reformer held residual private equity stakes that did not appear on her financial disclosures until NancyAnn DeParle received cash payments.

Blinken's government ethics filing indicates his background as a greed and leverage boy.


Even Blinken's Social+Capital Partnership LLC, (with two Cayman Island affiliates) operates as a private equity firm according to Bloomberg.


Blinken's filing indicated his managing partner position for WestExec, research positions at two universities, advisor for four organizations while providing advisory services to eighteen companies.  His wife held two positions that provide salary (unlisted), one of which provides stock options.

Members of America's Government-Corporate Monstrosity participate in a huge money grab at the expense of the average citizen.  Politicians Red and Blue love PEU and many are one.  Walter Shaub knows this well, having seen it from the inside.

Update 11-22-21:  The Blue Team has stocking goodies for the wealthy via more tax breaks.  Just what the public didn't order.  

Update 12-15-21:  Shaub wrote, "In an objective world, free of politics, members of Congress would be mocked for the absurdly weak ethics rules they've written for themselves."

Friday, November 12, 2021

Carlyle Group Speakers at Berlin's SuperReturn

The greed and leverage boys held their first face-to-face gathering since the pandemic began at Berlin's SuperReturn.  Co-Chairman David Rubenstein and CEO Kewsong Lee spoke about global opportunities and issues facing private equity underwriters (PEU).  

Virginia Governor Elect Glenn Youngkin (Red Team) swam in this globalist water just last year.  Congress continues to give billionaire PEU founders a free pass on fair taxation.

The average citizen  has long wanted the obscenely rich to pay more in taxes.  Fooled again.  Politicians Red and Blue love PEU and some are one.

Update 11-16-21:  Pitchbook ran a piece on the high profile PEU speakers at Berlin SuperReturn."The past 18 months have left many industries humbled. Not so with private equity. The asset class has performed exceptionally despite the macroeconomic headwinds."