Carlyle Partners with Milken, Has Four Speakers at MIGC

Fortune reported The Carlyle Group is partnering with The Milken Institute to make private equity more diverse.  

"The purpose is both creating opportunity and addressing the fiduciary responsibility to maximize returns."

Thus diverse populations must be taught the ways of the greed and leverage boys, also known as private equity underwriters (PEU). 

The Milken Institute is holding its annual global conference.  Four Carlyle Group PEUs are on the speaker's list.  CNBC is broadcasting from the event and interviewed Carlyle CEO Kewsong Lee this morning.  Lee is almost as good as Carlyle founder David Rubenstein in pushing the PEU model.

As for Carlyle's efforts on diversity they have been underway for years.  A 2019 KPMG report "The Call to Act" references the PEU's inclusion programs.  Syracuse University highlighted alumnus and Carlyle Group founder Daniel D'Aniello for a Doctorate in Humane Letters.

As a business leader, D’Aniello has long championed diversity and equity. 

Recall The World Economic Forum meeting in Davos, Switzerland identified income inequality as major priority for 2015. 

How can excessive wealth and income inequality be tackled whilst stimulating growth and innovation?

The excessively wealthy, i.e. The Carlyle's of the world, got wealthier while income inequality worsened the last five years.  

Milken Institute founder Michael Milken is the modern day PEU founding father.  Milken pioneered the use of leverage and junk bonds to raid companies, breaking numerous securities laws in the process.  Former President Donald Trump wiped Milken's criminal record clean as he lowered taxes on corporations (PEU affiliates) and the wealthy (PEUs).  

Policy making billionaires don't want to pay higher taxes so they must paint themselves as societal do-gooders.  Carlyle does not want to admit their role in offshoring U.S. jobs to China.  They did.  

Flashback to the 2012 World Economic Forum meeting:

Carlyle's Rubenstein expressed his preference for the Chinese totalitarian model of central planning.  Rubenstein offered a dark vision for those not adhering to his advice.

"Our children are going to have and our grandchildren are going to have" a lower quality of life and a less affluent lifestyle than we enjoy today

In many ways PEU Rubenstein already made his vision a reality.  Take United Components (UCI) which Carlyle owned from 2004 to 2010.

When Carlyle purchased UCI it had no Chinese subsidiaries.  By 2010 UCI had thirteen subsidiaries in China or Hong Kong.  The number of employees fell from 6,900 to 4,350.  Carlyle pulled $35.3 million from UCI via a special dividend in 2007.   Add their $2 million annual management fee and the total rises to $47.3 million.  How many jobs did Conway send to China outside UCI?

A major business reporter shared their concerns about the PEU boys and questioned the major move to China in 2011.

There are very few people out there who will talk and write honestly about private equity. 

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!

All I can say is that when people have too much access to cheap capital (thank you Greenspan and Bernanke) they tend to develop a very inflated sense of their real worth. First it was Mozillo over at Countrywide "spreading the American Dream." Now, the PE guys are "creating value" everywhere they go!

I can't tell if the PE guys are being insincere when they talk about China or they are actually stupid. There is no way that the Chinese govt would let American firms come in and strip cashout of Chinese companies the way they've been allowed to in the US! I imagine the Chinese welcome the PE guys because they see it as another way (through PE orchestrated mergers) to get hold of more American technology and companies and jobs.

Eve as the U.S. reassesses its over reliance on Chinese manufacturing Carlyle's CEO Kewsong Lee remains a supporter of PEU investments in China.  That may be one way to make Carlyle more diverse.

Update 10-19-21:  Carlyle's Chief of Global Credit got a microphone at Milken.  He said Carlyle is benefiting from high valuations.