Wednesday, May 26, 2021

Carlyle Adds to COVID Portfolio with Vectura Pharma

The Carlyle Group announced its intended purchase of Vectura Pharmaceuticals, a maker of inhaled medications.  Bloomberg reported Vectura is working on COVID-19 medicine.

A study on treatments for COVID-19 long hauler stated:

“long-haulers” or individuals with Long COVID – experienced symptoms and complications beyond the initial period of acute infection and illness like difficulty breathing or pulmonary diffusion abnormality, for months following the onset of infection. For asthma sufferers with known or suspected COVID-19, breathing difficulty can be particularly debilitating making finding treatments that can be conducted safely at home an additional concern. 

BioSpace reported:

While there are a myriad of symptoms associated with the illness often referred to as long COVID, including brain fog and fatigue, a large number of the therapies currently in development are geared toward the lasting lung fibrosis and respiratory problems.

Seeking Alpha stated:

Vectura makes drug delivery solutions for inhaled pharmaceuticals. It has 13 key inhaled and 11 non-inhaled products marketed by partners with global royalty streams, and a "diverse partnered portfolio of drugs in clinical development."

The company's in-market products include Seebri, Breezhaler and Neohaler, a DPI device and bronchodilator; AirFluSal Forspiro for the treatment of asthma and chronic obstructive pulmonary disease (COPD); Breelib for the treatment of pulmonary arterial hypertension; Relvar Ellipta/Breo Ellipta that is used in treating asthma and COPD; and Incruse Ellipta, Anoro Ellipta, and Trelegy Ellipta for the treatment of COPD. It is also developing VR315 (US) for the treatment of asthma and COPD.In addition, the company offers dry powder inhalers, pressurized metered dose inhalers, and nebulized devices.

Carlyle built a robust COVID-19 portfolio since February 2020.  Vecture appears to be its latest addition. 

Vectura has a mere $5.7 million in debt and employs 502 people.  These can change dramatically after private equity underwriters take over.  The greed and leverage boys have plans to profit handsomely from Murano Bidco and  COVID long haulers.

Update 7-10-21:  Philip Morris outbid Carlyle for Vectura.   Carlyle bought vaccine and gene therapy maker Unchained Labs to add to its COVID-19 portfolio.  

Update 8-16-21:  Carlyle increased its bid, but so did Philip Morris.  Vectura's board selected Philip Morris as the winner. 

Monday, May 24, 2021

Ivanka Latest to Get Boardroom Fog

Ivanka Trump is the latest executive to show boardroom fog in the midst of a civil or criminal investigation.  She was unable to recall the title of a fellow Trump Organization executive.  Her answer to "Who is Allen Weiselberg?"

“He is the — I would have to see what his, his — I don’t know his exact title but he’s an executive at the company.”

Recall Ivanka is employed by the Trump Organization and consulted for the company to the tune of almost $750,000. 

Forbes wrote:

In recent years, Ivanka has led the Trump Organization on some of its biggest deals…and has been given credit by those she’s negotiated with for her diligence and hard work.

Her father said "Ivanka specializes in acquisitions and design."  One of Ivanka's acquisitions was Trump Hotel in Washington, D.C.  The investigation targeted stratospheric hotel rates during Trump's inauguration.

Ivanka would have been paid by Allen Weiselberg.  Her expenses would've been reimbursed by Allen Weiselberg.  She would have negotiated deals with input from Allen Weiselberg.  

Her inability to "recall" Allen Weiselberg's title set the stage for other memory failures regarding the investigation.  This is a common practice by executives in trouble with the law.  

After a refinery explosion killed 15 people and injured 180, BP's Lord John Browne went to the Supreme Court to avoid giving testimony.  BP's executive in charge of refinery operations lost his memory under questioning from plaintiff's attorneys. 

Lord John Browne was finally deposed and appeared to be quite clueless.  BP CEO Tony Hayward also got boardroom fog after BP's giant Gulf of Mexico Oil Spew.  

Private equity underwrites like hiring smart executives after they recover from boardroom fog.  Browne went to Carlyle Group partner Riverstone Holdings.  Carlyle had its own refinery explosion in Philadelphia.  Hayward joined Vallares PLC, funded by Nathanial Rothschild.

Boardroom fog is a desirable skill of corporate chiefs, however jarring it may be to the general public.

Update 7-18-21:  The latest high profile person infected with memory fog is Jeffrey Epstein's underage girl recruiter Ghislaine Maxwell.  Maxwell "cannot even recall a single flight on Epstein's private jet with Ms Giuffre, even though flight logs show that (Maxwell) had 23 flights with Ms Giuffre while Ms Giuffre was underage."

Update 10-31-21:   Prince Andrew skipped the fog by going from straight-up denial that he sexually assaulted an underage Guiffre to impugning her character.  

Update 12-31-21:  A jury found Epstein accomplice Ghislaine Maxwell guilty of sex trafficking underage girls. 

Update 11-8-23:  Ivanka Trump testified in her father's civil trial for financial fraud.

In composed and succinct responses, she repeatedly said she did not recall specifics, or was not aware.

In this case it's Executive Vice President fog.

Update 11-12-23:  A former aide to Ivanka in the Trump White House said:

“I don’t buy that she doesn’t recall things.  Ivanka Trump is a very, very smart woman and has an amazing memory. I used to actually always marvel about that when I worked with her.”
Update 2-16-24:  As for memory problems in investigative cases the judge in Trump's civil fraud trial said of Ivanka:
"Despite being presented with ample emails and other documentary evidence demonstrating the critical role she played in the negotiation, Ms. Trump professed to have no memory of any of the events of the loan negotiation or the agreed upon terms." 
"But the court found her inconsistent recall, depending on whether she was questioned by OAG or the defense, suspect."


Sunday, May 23, 2021

PEU Boys Outraged by Possible Removal of Preferred Taxation


In the gilded realms of private equity, where mega deals and mega paydays beckon, the masters of leveraged buyouts are feeling a little put out.

From Park Avenue to Palm Beach, the conversation keeps turning to the same uncomfortable subject: an onslaught of taxes and the closing of the Billionaires’ Loophole.

After years of idle threats, Washington is talking seriously about ending the tax break that has helped private equity become one of the most lucrative corners of U.S. finance. Adding to the injury, other taxes on income and capital gains would also rise.

Private-equity types are, predictably, outraged.

For wealthy people like them, going after carried interest -- basically, their cut of the profits -- strikes many as anti-business, if not anti-American.

Preferred taxation for the greed and leverage boys has been a fixture under America's policy making billionaires.  Private equity founders like Carlyle Group's David Rubenstein and Blackstone's Stephen Schwarzman descended on Capital Hill to stymie past attempts to rectify this gross tax inequity.

Flash back to2011 when a former major business news reporter wrote:

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!

The private equity underwriter (PEU) lobbying group aided the blitz to keep preferred carried interest taxation intact.  I referred to the earlier version as PECKER, Private Equity Capital Knowledge Executed Responsibly.  In their name change they ignored my suggestion, settling on the vanilla American Investment Council.

Private equity’s formidable Washington lobby, the American Investment Council, is willing to talk. It’s working to convince members of Congress to protect the industry’s interests.

President Biden's cabinet and White House are chock full of PEUs.   Somehow with corporate valuations at stratospheric levels and a widespread proliferation of private equity firms, the amount of incremental taxes projected decreased

Scrapping the carried interest loophole could raise an estimated $15 billion from the wealthy over 10 years, according to a congressional committee.

When push comes to shove it will be interesting to see who's voice wins.  Will it be the general public who's long wanted the obscenely rich to pay more or policy making PEU billionaires?  The public is yet to win this battle.

Friday, May 21, 2021

Rubenstein Says Cryptocurrency is Here to Stay


Carlyle Group co-founder David Rubenstein is one of America's policy making billionaires.  Rubenstein held off the removal of private equity's preferred carried interest taxation over the last decade through his relationships with those in power.

Rubenstein indicated cryptocurrencies are here to stay.  

“I think it’s here to stay. Cryptocurrency is not going away, just like gold is not going away. Yes, it’s had its ups and downs and [Wednesday] was not a good day for it but that’s true of anything that is relatively new. … It’s here because people in the market want something other than just the traditional currencies that we’ve had and whether that’s right or wrong, it’s clearly something that the market wants.”

If the market wants it, it gets it.  Is there no role for government regulation to protect citizens?   

He also met with President Joe Biden in his role as Kennedy Center Chairman.  I imagine President Biden said something like "David, it is good to see you again."

Rubenstein's family office, Declaration Partners, is redeveloping a $1.4 billion housing complex on Boston's Bunker Hill.  He is personally planning to invest in Africa.  

His last three guests on Bloomberg's The David Rubenstein Show were Senator Tammy Duckworth, Commerce Secretary Gina Raimondo and Fed Chief Jerome "Jay" Powell.  The last two are former private equity underwriters and likely hold some residual stake in PEU affiliates.

Greed and the lust for power has overtaken our halls of government.  The Carlyle Group led the way.  Even in retirement David Rubenstein has to have more.  The system is designed for him to achieve just that and he had a major role in that design.

Update 5-26-21:  Rubenstein's Declaration Partners has a stake in cryptocurrency broker Paxos.  Did he declare that conflict in his interview?

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 10-23-21:   Biden's Commerce Chief entered the bowels of greed and leverage at Milken and said the following:

The opposition among some lawmakers – all Republicans as well as some moderate Democrats – to raising taxes on wealthy individuals is "almost religious fervor," said Secretary of Commerce Gina Raimondo at the 2021 Milken Institute Global Conference this week.

Milken, Rubenstein, Schwarzman et al created the PEU religion.  They created the greed and leverage fueled fever.  Raimondo should know given her PEU background.

 Update 5-11-22:  Fortune reported:

In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.

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.

Update 7-10-22:  On Meet the Press Raimondo called the public "cranky" for giving feedback on the impact of inflation to elected leaders.  It brought to mind Jared Kushner calling White House attorney resignation threats "whining."  Both Raimondo and Kusher are PEUs, one Red, one Blue. 

Update 1-4-23:  Raimondo has been mentioned as a future Treasury Secretary should Janet Yellen move on.

Update 7-7-23:   Former cryptocurrency hater BlackRock CEO Larry Fink called Bitcoin "digital gold."  His firm has applied for approval for a Bitcoin ETF. 

Thursday, May 20, 2021

Florida Homeowners Squeezed by PEU Level Greed

Wall Street on Parade

Across Florida, struggling families and senior citizens are opening their homeowners’ insurance renewal notices to learn that their policy will now cost them $800 to $1200 more than it did last year.

Rates are going up by 30 to 40 percent in many cases – during a National Emergency. Making the outrage among residents more palpable is the fact that a hurricane didn’t even touch down in Florida in 2020.

That sounds like the legendary returns of private equity underwriters, also known as the greed and leverage boys.  Forbes wrote in 2012:

"People generally don't love investors and people who have made great wealth in every society," says Carlyle Group co-founder David Rubenstein. "In the past no investor ever asked me how many jobs I created; they never cared. But they did say, 'Give me my rate of return.' " Rubenstein adds: "We have made a lot of money for our investors, and most of them, not all, are big public pension funds who seem to like the returns."

Carlyle's private equity funds have averaged 18% annual net internal rates of returns since inception

Carlyle's co-CEO Glenn Youngkin spoke at the Morgan Stanley Virtual Conference in June 2020.  He highlighted Carlyle's 97% stake in re-insuror Fortitude Re.

Fortitude Re has $43 billion of total assets and as you will all remember, as part of this transaction, roughly $6 billion of those assets are being rotated into private capital strategies managed by Carlyle. So we're excited about this final step. It solidifies Fortitude as a source of long-term capital for us but on top of that, now, we're well positioned to grow through acquisitions by looking at adding on additional runoff blocks of insurance portfolios. 
We do make money here in three ways. We of course have our investment income off of the balance sheet investment that we made in Fortitude. And then as the assets rotate into Carlyle Funds or investment activities, we of course earn management fees from those assets and have the potential to earn performance revenues off of them as well. 

Youngkin is currently the Red team nominee for Virginia governor.  The Forbes piece noted Carlyle's mining of former government officials

Carlyle also amassed a slew of former government heavyweights--and an accompanying cloak-and-dagger reputation.

"The early success in defense helped us understand that we had a core skill of dealing with businesses that are heavily impacted by government policy and regulation such as transportation, health care, telecommunications, etc.," says Carlyle Group co-founder Daniel D'Aniello.

What could Glenn Youngkin do for Carlyle as Virginia's governor?  How will Virginia residents pay for Carlyle to earn profits in multiple ways?  

Sunday, May 16, 2021

Biden Cyber Nominee to Protect Morgan Stanley's Bitcoin Futures


President Biden nominated Jen Easterly for a key cybersecurity position in his White House.  Easterly works for Morgan Stanley defending the firm from cyber threats.  Morgan Stanley announced it would cram Bitcoin Futures contracts into a smattering of its mutual funds.  Bitcoin is the favored currency of ransonware pirates.  I imagine the head of cybersecurity had input as to the safety of Bitcoin and the risk's involved in investing in the cyber-currency. 

The SEC had this to say about Morgan Stanley's move:

Bitcoin is a “highly speculative” asset, according to the staff statement, published Tuesday by the Division of Investment Management. The note warned investors in mutual funds that trade bitcoin futures may be taking on more risk than they realize.

Goldman Sachs announced it would offer Bitcoin derivatives.  How long before Goldman is charged with manipulating that market?  Morgan Stanley also has a record of self dealing to the detriment of customers.

As a public official Easterly would be in a position to influence the direction of those Bitcoin futures.  Easterly knows how to defend Wall Street with its new Bitcoin bet products. 

Thursday, May 13, 2021

Biden's CyberSecurity Nominee Inglis is a PEU


Chris Inglis is President Biden's nominee for National Cyber Director.  He's also is a private equity underwriter for Paladin Capital.

Inglis joined Paladin Capital in 2014 and had six years to invest alongside Paladin's limited partners.  Those investments are private and difficult to shed.  

Inglis serves on two private boards, Blackpoint and Securonix, as well as two public companies, FedEx and Huntington Bankshares.

Biden's cabinet is chock full of PEUs.  The greed and leverage boys identified political connections as a way to make big money.

President Obama's health reformer, Nancy-Ann DeParle, came from the PEU world and returned to it afterwards.  Her financial disclosure omitted any residual PEU investments, yet a payout from MedQuest, appeared years into her public service.  

If approved as National Cyber Director how will Inglis divest himself of difficult to flip private equity holdings. Will he be paid for residual stakes years into his public service like Obama's health reformer?

Politicians Red and Blue love PEU.  And PEUs love what politicians can do for them. Uncle Sam's wallet is good for spending.  However, the greed and leverage boys are loathe to fill it with a slice of their massive profits.

Tuesday, May 11, 2021

Carlyle's Youngkin Gets Red Team Nomination for VA Governor

 Axios reported:

Virginia Republicans on Monday night nominated Glenn Youngkin, former co-CEO of The Carlyle Group, to take on Terry McAuliffe in the year's only open-seat governor's race.

Why it matters: Private equity candidates can become proxies for the industry, and how the public views it.

Youngkin wants Virginia voters to consider his record as a businessman, specifically a private equity underwriter (PEU).  The Carlyle Group located in Washington, D.C. in order to manipulate the levers of political power and access Uncle Sam's wallet.

PEUReport has five questions for Youngkin now that he's locked up the Republican nomination for Virginia Governor.  They are:

1)  Why did Carlyle withdraw as leader of the $1 billion Corpus Christie port expansion project on Harbor Island? 

Why did the Carlyle Group, Carlyle Investment Management LLC and Carlyle Global Infrastructure Opportunity Fund drop the 50 year lease project into the lap of partner The Berry Group less than a year after publicly announcing the venture?  

This is relevant as The Carlyle Group bid on Virginia port operations in the past and Youngkin was co-CEO of Carlyle when it reneged on the deal.

2)  Why did Carlyle allow affiliate SemGroup, a staid energy pipeline company, to repeatedly naked short oil futures?

Rampant financial speculation resulted in SemGroup declaring bankruptcy in 2008.  SemGroup made over $3 billion in bad energy bets undertaking financial activities not declared in the company's SEC filings.  

From 2005 to 2008, Mr. Youngkin was the Global Head of Carlyle's Industrial Sector investment team. Carlyle added funds to SemGroup to prop the company up in the midst of huge trading losses.  Former FBI director Lois Freeh investigated why the company failed so spectacularly. A settlement against defendants, including Carlyle, cited "a failure to develop or implement a suitable risk management policy."

3)  Why did Carlyle affiliate auto parts maker UCI cut jobs from 6,900 in 2004 to 4,350 in 2009?  UCI added jobs in China while it cut American jobs.  


UCI added seven subsidiaries in the People's Republic of China and six in Hong Kong between 2004 and 2009. 

Youngkin highlights his record of growing jobs.  He can speak to UCI's American job loss having served as Global Head of the Industrial Sector investment team during this period.

4)  What exactly did Carlyle affiliate ARINC do to earn a 33 month ban from the World Bank for procurement violations?  

The project involved airport development in Egypt.  The ruling came while Youngkin served as Carlyle's Chief Operating Officer.

Youngkin held a senior position at the time of the World Bank ban and the project involved public infrastructure.

5)  Why did Carlyle have over 180 subsidiaries in The Cayman Islands, a renowned tax haven?

As a senior executive for Carlyle Youngkin can explain to the taxpaying public why his employer located so many subsidiaries outside U.S. tax jurisdiction.

I expect candidate Youngkin to avoid any questions about his dealings at The Carlyle Group, citing confidentiality agreements or other such nonsense.  However, he is running for public office using his business experience as a bona fides.  

Youngkin brags on PEU contributions while running from Carlyle's dark history.  There are more questionable Carlyle dealings that I did not raise.  They may come to fore in due time.

Update 5-12-21:  Youngkin came out swinging, saying the Blue team ran Virginia into a ditch.  He said nothing about his questionable record at Carlyle.  The article said Youngkin grew up in Bon Air.  PEUReport grew up a few miles away in Stratford Hills.

Update 7-9-21:  VA Scope reported Democrats are attacking Youngkin for his Carlyle Group dealings.  The story mentioned sending jobs overseas but nothing about Carlyle's numerous ethical lapses or widespread use of tax havens.

Update 8-6-21:  Youngkin's checkered career with Carlyle included infrastructure funds.  "He
oversaw a push into infrastructure projects that dogged him, as a $2.2 billion fund for clients struggled to make deals."

But the infrastructure push haunted him. The fund that Carlyle raised in 2018 struggled to move large deals forward, such as the redevelopment of Terminal One at New York’s John F. Kennedy Airport. According to Carlyle, the fund had invested just $466 million as of last December, when a new head was brought in.

One customer, the Teacher Retirement System of Texas, said it was told the fund had a negative return of 51% at the end of 2020.

Update 9-25-21:  The Blue Team went after Youngkin for Carlyle's ManorCare debacle and horrible quality at Small Smiles, a dental company.  While both are bad stories  it is hard to see Youngkin's involvement.  Both ManorCare and Church Street Dental have been cited by PEUReport.

Update 10-17-21:   U.S corporations sending jobs to China has been characterized as "a distraction"  Meanwhile, Youngkin's former co-CEO believes China deserves even more investment.

Monday, May 10, 2021

Political Legends Behind Granholm's Proterra

Proterra made the news recently for former board member and Energy Secretary Jennifer Granholm's conflict of interest after President Biden and Vice President Harris toured Proterra's production facilities.  CNN reported:

That Granholm even promoted electronic cars as part of the administration's climate push is already ethically questionable, experts say, but Biden and Harris' direct highlighting of Proterra is even more problematic as it could increase the company's value when it goes public -- and increase Granholm's profits. 

So who stands behind Proterra?  Al Gore and Colin Powell are advisors for major investor Klein Perkins, which has two board slots.

Al Gore is also chairman and co-founder of Generation Investment Management, another early investor in Proterra. 

Energy Secretary Jennifer Granholm joined Proterra's board in March 2017.  Concerns have been raised about her divestment of Proterra stock and stock options.  As a private company a ready market does not exist for her to sell her shares.  

 Proterra will go public via ArcLight Clean Transition Corp.  

ArcLight Clean Transition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on July 28, 2020. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified
Special purpose acquisition corporations (SPAC) are a sign of greed and compromised ethics.  


ArcLight has two top leaders who highlight their role with Clean Energy for Biden.  Generation Investment Management has one board slot which will remain after the SPAC combination

Other appointed and elected officials have kept residual private equity stakes while "ethically" serving the public.  White House health reformer Nancy-Ann DeParle and Florida Senator Rick Scott had questionable financial filings.  DeParle had a residual private equity stake in MedQuest that was undeclared in prior forms.  Both transferred assets to family members but could easily have retained control and benefited from conflicted holdings.  

Oddly Senator Scott made his fortune with hospital giant HCA.  Rick Scott left in disgrace as HCA paid a $1.7 billion fine for fraudulent billing.  Nancy-Ann DeParle joined HCA's board in 2014 and currently holds stock worth $3.8 million.

Politicians Red and Blue love PEU (private equity underwriters).  Some dance back and forth between the private and public sector.  Most make money regardless of which party is in power.  They designed a game where those who accumulate the most wealth win.  

These are the same people not wanting to pay higher taxes on their massive gains.  The size of Secretary Granholm's gains from Proterra remain to be seen.

Update 5-12-21:  The Carlyle Group is in energy as a service, electric bus recharging, via a joint venture with Schneider Electric.  Their first project is in David Rubenstein's backyard (not literally).

Update 5-18-23:  Carlyle's joint venture with Schneider Electric, AlphaStruxure, will outfit a Rockville, Maryland bus station with a solar power system used to produce hydrogen fuel for buses.

Tuesday, May 4, 2021

Cruz Confesses Red Team Loves PEU

Politicians Red and Blue love PEU (private equity underwriters).  Storied private equity firms prize their political connections.  Senator Ted Cruz (R-TX) shed light on this unseemly side of politics.

Cruz warned that CEOs opposing Republican threats to voting rights will be excluded from his party’s pay-to-play legislative operation — because they’re no longer conservative enough for the GOP.

For example, Republicans will stop accepting donations in exchange for “looking the other way” when corporate bigwigs dodge taxes, Cruz wrote in a stunningly honest admission of his party’s current modus operandi.

“This time,” he wrote, “we won’t look the other way on Coca-Cola’s $12 billion in back taxes owed. This time, when Major League Baseball lobbies to preserve its multibillion-dollar antitrust exception, we’ll say no thank you. This time, when Boeing asks for billions in corporate welfare, we’ll simply let the Export-Import Bank expire.”

That's right, the exercise of corporate free speech will not be tolerated by the Red team.  Trump like payback is the Red team's mantra.  Cruz's anger filled flailing resulted a few self punches, according to former government ethics chief Walter Shaub.

Cruz’s threat is a blatant admission that Republicans are selling corporate donors “access to the government.” In a clear swipe at Cruz’s clueless self-exposure, Shaub noted that most lawmakers have too much “sense” to say it quite so brazenly.

“It’s the part everyone knows: these crooks sell access,” Shaub tweeted. “Others have the sense not to admit it. This is why our republic is broken: Immoral politicians selling power we’ve entrusted to them like it’s theirs to sell.”

Buyers of influence kept private equity's preferred carried interest taxation in place for decades.  Red and Blue politicians catered to The Carlyle Group's David Rubenstein, Blackstone's Stephen Schwarzman, KKR's Henry Kravis and Apollo's Leon Black vs. public opinion.  

Watch for Cancun Cruz's vote on eliminating carried interest taxation.  Will he vote against Trump friend Stephen Schwarzman's PEU interest?

Monday, May 3, 2021

China Takes "Flash out of Pan" for Ant Financial


ZeroHedge reported Fidelty wrote down its Ant Group holdings after the Chinese government held up a planned IPO.

At a $144 billion valuation, Fidelity is signaling to investors that it believes Ant is worth less now than it was three years ago - now that the hope of a exit to China's army of retail investors has been forestalled, perhaps permanently - when Fidelity first purchased its stake. This roughly squares with what analysts have warned, as many have pointed out that Beijing's crackdown will put a lid on Ant's potential growth and profitability.

WSJ also pointed out that the $144 billion number represents "a big comedown from last August, when Fidelity's marks pinned the company's valuation at $295 billion, the filings showed.

The Carlyle Group invested in Ant Group the same time as Fidelity (three years ago).  The postponed IPO valuation was $315 billion.  Warburg Pincus valued Ant at $220 billion at the end of 2020.  A fall to $144 billion could cause lots of pain for the greed and leverage boys.

Former Carlyle co-CEO and seeker of Virginia's Republican gubernatorial nomination Glenn Youngkin is worried that President Biden's proposals will produce a "flash in the pan" economy.

Ant's valuation soared from $150 billion to $315 billion in a few short years.  Youngkin would have been ecstatic to monetize that flash rise.  

Fidelity wrote down its stake to below its initial investment.  Will Carlyle and company do the same?  How much hot air will come out of the PEU balloon?

Update 9-23-21:   Carlyle CEO Kewsong Lee reiterated his PEU's commitment to making huge profits in China.  Will Chairman Xi allow the greed and leverage boys to suck billions from the Chinese economy?  It remains to be seen. 

Saturday, May 1, 2021

Candidate Glenn Youngkin Ignored Taylor Swift's Pleas as Carlyle co-CEO

Winchester Star
reported on a visit by former Carlyle Group co-CEO Glenn Youngkin, looking to garner the Republican gubernatorial nomination:

 “I have a 30-year business career that has real-world experience that is so different from any Republican, any Democrat,” Youngkin said. “It’s prepared me in a way on how to understand how to get things done in a complicated, big organization. How to deliver as opposed to making empty promises. How to set expectations and hold people accountable, including myself."

 Glenn Youngkin attended the World Economic Forum as Carlyle's co-CEO.  Interviewer Andy Serwer asked Youngkin about Taylor Swift's plea to Carlyle to help her buy the rights to her music owned by Carlyle affliate Ithaca Holdings.  Here's Youngkin's answer:

I think we all appreciate what a spectacular musician Taylor Swift is.  To disappoint you I can't give you an update.  But I do think that it does represent, I think a focus that private equity is getting today.  And I think that focus is the result of the fact that we haven't done a great job of helping everyone understand really what we do and the full nature of the economic contribution that we make.  And I think that's one thing our industry needs to do better.

Facts say Taylor Swift's music was sold to Carlyle backed Ithaca without her knowledge or opportunity to buy those rights.  Ithaca then sold those rights to Shamrock Holdings without Swift's knowledge.  Despite her pleas to The Carlyle Group Swift was not given the opportunity to buy the rights to the music she created.  In his defense of private equity underwriters (PEU) Youngkin said:

"We invest in companies to make them better, not to hurt them  We invest in projects to make them better, not to hurt them."

How did buying and selling the rights to Taylor Swift's music without her knowledge make that music better?   The one record Ithaca released of Swift's old music bombed without the artist's support.

Taylor Swift believes she was hurt by Carlyle backed Ithaca.  There is no evidence co-CEO Glenn Youngkin did anything to give the artist a shot at buying back her creations.  

Virginia voters may not care about Taylor Swift's music, but they should care about fairness.