Saturday, April 30, 2022

Milken, Manchin and Marks: PEUs Have Taken Over


The crowning event on the last day of the Milken Global Conference is founder Michael Milken's interview of Oaktree Capital Management co-founder Howard Marks. They will discuss six decades of financial innovation, marked by the proliferation of private equity underwriters (PEU).  "Junk Bond King" Milken is considered a PEU founding father.


PEUs proliferated since 2000 under both Red and Blue White Houses.  Victory Park Capital was founded in 2007.  Former Senator and Vice Presidential candidate Joe Lieberman joined Victory Park as Chairman of its Executive Board in January 2014.  

This evening Blue Team Senator Joe Manchin will be attending a private event in the Los Angeles home of Howard Marks, co-founder of investment fund Oaktree Capital Management.  The event is sponsored by No Labels.  


No Labels National Co-chair is Senator and PEU Joseph Lieberman.

Politicians Red and Blue love PEU and increasingly, more are one. These Joes know it well.  Joe Manchin will be richly rewarded by the greed and leverage boys when he retires from Congress.

Update 5-3-22:  The Milken crowd believes there is only one way to solve the problems of the world, by their profiting grotesquely.

Update 5-5-22:  The Lever reported "Politicians have cut secret deals funneling retirees’ savings to financial firms — but new legislation would finally let the public see the details." 

Update 7-15-22:  Manchin keeps watching billionaire backs by opposing tax increases on the super wealthy.  Manchin is a hero to the PEU boys.  Many of Trump's billionaire backers are now supporting Manchin.

Update 7-18-22:  Manchin canoodles with billionaires to raise $1 million.  Serving the people who live outside West Virginia as Manchin's state has no billionaires. 

Friday, April 29, 2022

Milken Global Conference Celebrates Connections


The Milken Institute Global Conference starts tomorrow with the theme "Celebrating the Power of Connection."  Connections got "Junk Bond King" Michael Milken's criminal conviction scrubbed.  There is no longer an official record of his committing major financial crimes, including securities fraud.

Carlyle Group co-founder and policy making billionaire David Rubenstein used his power of connection up and down Pennsylvania Avenue.  The White House address is 1600 Pennsylvania Avenue while Carlyle's corporate office is a mere five blocks away.

The greed and leverage boys hold Milken up as a founding father.  A smattering of private equity underwriters (PEU) will speak at the event.  Carlyle has two speakers on the official agenda:

KKR has three speakers covering four events:

Blackstone will present at two sessions but will be absent from a housing session, where they've had a huge impact on rising rents, late fees and evictions through affiliate Invitation Homes.

A whistleblower lawsuit alleges Invitation cheated California cities/towns out of millions by not getting building permits for renovations.

Apollo Global Management has two speakers, co-founder Marc Rowan and Scott Kleinman.  Rowan gets his own breakfast club session.

Themes for the event have included:

I suggest an underlying theme for the last few decades has been "Pardon me, but Greed is the way."  What happens at California Davos often ends up in Congressional bills.  Politicians Red and Blue love PEU and increasingly, more are one.

Update 5-2-22:  Jesse's Cafe Americain noted the Nordic Flash Crash and commented:

Seriously, how can one expect a multi-billion dollar trading platform for a global financial institution to bother with any safeguards against potentially systemic critical 'typos.'   LOL

The financial fourth estate was too busy swooning over the international cast attending the Michael Milken conference at the Beverly Hilton to be concerned about any of these market-busting, existential questions.

Update 5-5-22: The Lever reported "Politicians have cut secret deals funneling retirees’ savings to financial firms — but new legislation would finally let the public see the details." 

Update 5-7-22:  FT has a summary of Milk'em Global Conference.  The greed and leverage boys are having a sphincter moment as fellow PEU Jay Powell stopped spiking their punch-bowl and is purported to be administering doses of Narcan.   

Update 5-17-22:  German Allianz SE agreed to pay $6 billion and plead guilty to securities fraud for its Structured Alpha funds.  Reuters story stated "managers also inflated fund results to boost their pay through performance fees."  If they follow the Milken game plan a pardon could be in their distant future.

Tuesday, April 26, 2022

Kevin Hart Takes PEU Money


Abry Partners invested $100 million in comedian/actor Kevin Hart's new company.  

HARTBEAT said it would produce and distribute television and film content focused on "comedic storytelling" and that it was in various stages of development or production on more than sixty projects. 

The greed and leverage boys are rarely ha-ha funny.  Consider Abry affiliate Securus Technologies.  The following is from a 2015 post.

" ... an anonymous hacker who believes that Securus is violating the constitutional rights of inmates — comprise over 70 million records of phone calls, placed by prisoners to at least 37 states, in addition to links to downloadable recordings of the calls. The calls span a nearly two-and-a-half year period, beginning in December 2011 and ending in the spring of 2014. 

Particularly notable within the vast trove of phone records are what appear to be at least 14,000 recorded conversations between inmates and attorneys, a strong indication that at least some of the recordings are likely confidential and privileged legal communications — calls that never should have been recorded in the first place.

Abry did just fine on their Securus investment.  There are little to no consequences for any PEU antics or hijinks.  The PEU boys are more disturbing, like a twisted dark comedy.  That's the "got to have more" world.  

In January John Legend sold his music to PEU KKR.  Today BuzzFeed ran a report on the harm KKR's buyout did to developmentally disabled residents of group homes.

It's just another day...

I had a dream last night,
The world was set on fire.
And everywhere I ran,
There wasn't any water...
The temperature increased,
The sky was crimson red,
The clouds turned into smoke,
And everyone was dead.
 
But there's a smile on my face,
For everyone...
There's a golden coin,
That reflects the sun...
There's a lonely place,
That's always cold...
There's a place in the stars,
For when you get old.


 

Update 5-26-22:  Justin Timberlake is the latest artist to sell his music to the greed and leverage boys.

PEU Perpetual Dynasty Wealth

The greed and leverage boys don't want to pay taxes in their lifetime.  They want tax avoidance to be perpetual for their friends and relations.  They are policy making billionaires, thus elected officials cater to their whims and wishes.  

The sparsely populated state of South Dakota has become a haven for dynasty trusts.  

US politicians like to boast that their country is the best place in the world to get rich, but South Dakota has become something else: the best place in the world to stay rich.

Private equity underwriters (PEU) hate paying taxes.   Carlyle Group co-founder David Rubenstein paid 11.4% of his earnings in federal income taxes.  This policy making billionaire lobbied Congress multiple times to keep private equity's preferred carried interest taxation.

Politicians Red and Blue love PEU and increasingly, more are one.  They ignore public will which has long wanted the rich to pay their fair share in taxes.

Monday, April 25, 2022

Top U.S. Cabinet Officials Visit Ukraine


What are the odds two private equity underwriters with Pine Island Capital Partners would make the top two cabinet positions in President Biden's White House?  Secretary of Defense Lloyd Austin and Secretary of State Anthony Blinken did just that.  They traveled to Ukraine over the weekend to meet with President Volodymyr Zelenski.

Blinken and Austin informed Zelensky of more than $322 million in new foreign military financing for Ukraine, bringing the total US security assistance to Ukraine since the invasion to about $3.7 billion, the official said.

"It will provide support for capabilities Ukraine needs, especially the fight in the Donbas," the official said. "This assistance will also help Ukraine's armed forces transition to more advanced weapons and air defense systems, essentially NATO capable systems."

More than 50 Ukrainians were set to complete training on Monday to operate Howitzer heavy artillery that Washington has begun sending to Ukraine in recent weeks to reflect that fighting is now focused in the flatter, more open Donbas region.

Pine Island Capital Partners has two portfolio companies, Precinmac and InVeris Training Solutions.  

Precinmac is a critical supplier to prime contractors in the aerospace, defense, semiconductor, automation, and other sectors that rely on ultra-high precision manufacturing capabilities and expertise.

InVeris Training Solutions is the world leader in developing and deploying advanced technology-enabled virtual and live-fire training systems for military, law enforcement, and commercial customers.  The Company operates with a philosophy of safety through training across two segments – intelligent virtual and live-fire training systems. Its advanced systems have been deployed in over 130 countries. 

I imagine business has gone up for Pine Island Capital affiliates as a direct or indirect result of President Biden appointing them to his Cabinet.  Did Ukraine obtain any of their services in the $3.7 billion of U.S. military assistance announced to date?

Update 4-27-22:  Yahoo reported:

Ukrainian Minister of Foreign Affairs Dmytro Kuleba made this statement during a live stream on his Facebook page, "Evropeyska Pravda" reported. "We have entered a completely new phase, one which no one even thought about two months ago. We have entered a fundamentally new phase, which no one even dreamed of - the transition of the Armed Forces of Ukraine to NATO weapons, to NATO standards.

How might this drive business to Precinmac and/or InVeris Training Solutions?

“Precinmac has a long history of delivering value to customers through design assistance, precision manufacturing, and assembly, and we see an opportunity to further grow the business among aerospace, defense, semiconductor, and industrial companies,” said Admiral Michael Mullen, a partner at Pine Island and the new chairman of the board of Precinmac. 

The Chairman of InVeris Training Solutions board of directors is Pine Island Capital Partners Partner, and Former US Sen. Saxby Chambliss. 

Update 5-11-22:   Glenn Greenwald reported Congress upped the Biden budget request of $33 billion for Ukraine to $40 billion.  Most of that will be spent on weapons.  How much will Pine Island affiliates profit from these funds?

Carlyle Co-founder Introduces Jon Stewart for Twain Prize


Hollywood Reporter
noted:

Kennedy Center chairman David Rubenstein opened the event with a nod to the seriousness of current events both at home and abroad, then added that (Jon) Stewart was chosen as this year’s Twain prize recipient as he’s not only a great humorist, but also a social commentator who is invested in the betterment of our country.

Jon Stewart joked “it’s the leaders. It’s not the Fresh Prince, it’s the crown prince....  Comedy is the bellwether, we’re the banana peel in the coal mine… Authoritarianism is the threat to art, theater, poetry…. What we have is fragile and precious, and the way to guard against it isn’t to change how audiences think, but to change how leaders lead.”

David Rubenstein co-founded The Carlyle Group, a politically connected private equity underwriter (PEU).  He has long been a policy-making billionaire.  Non-lobbyist Rubenstein used his Capitol connections to keep private equity's preferred carried interest taxation, doing so on more than one occasion.  These occurred despite decades of public-will in favor of the super rich paying their fair share in taxes.  A recent study revealed Rubenstein paid at a tax rate of 11.4%, the lowest rate of his PEU peers.

Steve Carell honored Stewart for “making sense out of the insane and finding joy in the darkness.”  Anyone working a PEU affiliate has long struggled to make sense of the insane. It's also good advice for those who understand the outsized influence the PEU boys have on public policy outside the light of transparency.   The greed and leverage boys operate in ways unseen and mostly unknown.

Politicians Red and Blue love PEU and increasingly, more are one.

Saturday, April 23, 2022

PEU Air Ambulance Vultures


New York
magazine investigated the impact of private equity ownership on air ambulances.  It reported:

In 2010, Bain Capital bought Air Medical Group Holdings for $1 billion, only to sell it five years later for double that amount to KKR, which, in turn, merged the company with yet another air-ambulance provider, American Medical Response, under the name Global Medical Response. (Tracking this shell game can be dizzying. In the three years between Hoechlin’s air-ambulance flight and mine, Guardian Flight merged with REACH Air Medical Services; both are owned by Global Medical Response.) In 2017, American Securities drastically accelerated private equity’s takeover of the air-ambulance industry with its $2.5 billion purchase of Air Methods, the largest domestic provider of air ambulances. (In 2016, during its final year as a publicly traded company, Air Methods posted a $97.9 million profit on $1.17 billion in revenue, and the year before had paid its CEO $2.5 million in direct compensation, including stock options.) That purchase established the industry’s current landscape, in which two private-equity firms, American Securities and KKR, control almost two-thirds of the national market for air ambulances, according to Medicare data. 

As private equity tightened its stranglehold on the industry, it jacked up the already-high prices.  Between 2008 and 2017, the median price charged by providers for helicopter air ambulances nearly tripled, jumping from $12,500 to $35,900 per flight

The greed and leverage boys don't care if healthcare is affordable to citizens.  They don't want to give up their preferred carried interest taxation.  They want more and they want it unceasingly.

Who could reign in these destructive private equity underwriters (PEU)?  Congress and state legislators could, but they won't.  Politicians Red and Blue love PEU and increasingly, more are one.

Update 4-24-22:  Former Clinton Labor Secretary Robert Reich wrote:

The raiders altered the “free market” to allow them to do this. That’s what the super-rich do. There’s no “free market” in nature. The “free market” depends on laws and rules. If you have enough money, you can buy changes in those laws and rules that make you even more money. (You can also get the government to subsidize you....

Reich's former boss aided a fledgling private equity industry during his eight years in office.  They had three decades to distort government to their will.  Elon Musk likes flaunting regulators in plain sight, a no-no for the greed and leverage boys who operate in the shadows.

Update 4-25-22:  Reuters reported KKR will shaft more patients and healthcare workers in the future:

Buyout firm KKR & Co Inc said on Monday it has raised $19 billion from investors for its latest flagship North America private equity fund, its biggest fund ever.

The fund, KKR North America Fund XIII, will make investments in businesses operating in sectors such as financial services, healthcare, retail, industrials, technology, media, and telecommunications, primarily in the United States and Canada.

 

Wednesday, April 20, 2022

PEU Model Pay for Goldman Executives

WSJ reported how Goldman Sachs is adopting private equity underwriter (PEU) practices:

David Solomon is getting a bigger slice of Goldman Sachs Group Inc.’s private-equity profits.

The Goldman Sachs chief executive and a tight circle of lieutenants are taking a cut of profits from the firm's private investment funds.

Imitation is the highest form of flattery, so the greed and leverage boys must be feeling pretty good as greedy Wall Street firms conform to their PEU model.

Goldman CEO Solomon did increase its dinner stipend from $25 to $30 for employees working late.  SEC filings indicate Solomon made nearly $40 million in 2021.   It's hard to own a sports team with pay that little.

Tuesday, April 19, 2022

PEUfluencers like Crypto, Blockchain


The greed and leverage boys now believe in cryptocurrencies and blockchain.  Apollo CEO Marc Rowan and Carlyle Group co-founder David Rubenstein expressed their support on a Bloomberg Wealth interview.  Rubenstein interviewed Rowan.

Apollo's ties to child sex trafficker Jeffrey Epstein (through founder Leon Black) are also out of the bottle.  Hard to put that one back in.

Update 5-18-22:  The cryptocurrency unwind came quickly after financial whores Bill Clinton and Tony Blair were in the Bahamas pushing crypto.

If you don’t see that the crypto “industry” has become just as blindingly corrupt, just as oozingly fatuous, just as profoundly captured by the Nudging Oligarchy as the traditional financial services industry it was supposed to replace … well, you’re just not paying attention.

Update 7-11-22:  Crypto hedge fund Three Arrows Capital founders are AWOL.  Creditors asked a court to "subpoena the founders and have them provide a list of company assets including wallets it controls, bank accounts, digital assets in its possessions, derivatives contracts, securities, accounts receivables, and all company records." 

Update 8-2-22:  FDIC insured banks ran with the crypto devils and may go under as a result.  How this is remotely OK is a question one should ask David Rubenstein and his former employee Jerome Powell/

Monday, April 18, 2022

Rubenstein to Buy Washington Nationals

Carlyle Group co-founder and policy making billionaire David Rubenstein could own a chunk of Major League Baseball's Washington Nationals.  The Carlyle Group, a politically connected private equity underwriter (PEU), sports a Pennsylvania Avenue address.  Mr. Rubenstein is able to have his phone calls to elected officials answered or promptly returned.  

Update 8-25-22:  Rubenstein is part of a bid for the Nats.

For decades the U.S. Congress kept private equity's preferred "carried interest" taxation at Rubenstein's encouragement.  The man is very skilled at tax avoidance.  

Politicians Red and Blue love PEU, and increasingly, more are one.   

Update 4-19-22:  A Russian oligarch put Chelsea FC up for sale and one bidder is U.S. oligarch Bain Capital's Steve Pagliuca.   

Update 4-20-22:  Public subsidies for billionaire sport team owners can be seen in the proposed deal for the new stadium for the Buffalo Bills.

Update 7-10-22:  Former Carlyle PEU Michael Kim may bid on the Nationals.  It could be a PEU club deal. 

Wednesday, April 13, 2022

Politically Connected Rubenstein Paid Mere 11.4% in Federal Taxes

Carlyle Group co-founder David Rubenstein paid a mere 11.4% of his $133 million in income in federal taxes.  All of his income was taxed at the lower capital gains rate or as carried interest, preferred taxation for private equity underwriters (PEU).  

A ProPublica report showed nearly 400 PEU boys with the highest earning $782 million and the lowest $110 million.  Private equity mavens paid an average of 22% of their income in federal taxes.

Recall how Carlyle turned political influence into massive profits.  David Rubenstein dined with Presidents of all stripes over the last two decades.  As a policy making billionaire Rubenstein calls all his chits whenever someone gets serious about getting rid of private equity's preferred taxation.

Politicians Red and Blue love PEU and increasingly, more are one.

Update 4-13-22:  Between 2014 and 2018, the 25 wealthiest Americans collectively earned $401bn, but paid just $13.6bn – about 3.4% of that – in taxes.  These policy making billionaires are the direct beneficiary of government tax policies and financial interventions during times of crisis.

Update 4-20-22:  Goldman Sachs CEO will be paid like a PEU chief.  Can he get down to Rubenstein's 11% federal income tax rate?  He did toss a meal stipend bone to GS workers staying late in the office.

Update 4-22-22:  The richest man in Bethesda, Maryland hates paying taxes.  He hosts three television shows, two on Bloomberg and one on PBS.   That's nice of the media to give regular airtime to a policy making billionaire.  I'll wager his taxes stay low.  Also, bad press means no future interviews, so reporters beware.

Monday, April 11, 2022

Saudi Crown Prince Funds Kushner, Mnuchin PEUs


The Saudi Public Investment Fund, controlled by Crown Prince Mohammed bin Salman, invested $2 billion in Jared Kushner's new private equity firm six months after Kushner left the White House.

The fund's screening committee voted unanimously against investing in Kushner's Affinity Fund, citing the "inexperience" of its management, an asset management fee that "seems excessive," and the fact that due diligence found the firm's operations "unsatisfactory in all aspects." 

At the same time, the screening committee endorsed the fund's $1 billion investment with former Treasury Secretary Steven Mnuchin's new Liberty Strategic Capital.

"Ethics experts say that such a deal creates the appearance of potential payback for Mr. Kushner's actions in the White House — or of a bid for future favor if Mr. Trump seeks and wins another presidential term in 2024." 

Politicians Red and Blue love PEU (private equity underwriters) and increasingly, more are one.  Mnuchin and Kushner served the PEU class in office.  PEU service facilitated their return as greed and leverage boys.  

“Affinity, like many other top investment firms, is proud to have PIF and other leading organizations that have careful screening criteria, as investors.”

The Prince of Death supports the Lords of Greed.  No surprise. 

Update 5-16-22:  Former golf great Greg Norman said in a response to the Crown Prince ordered killing of journalist Jamal Khashoggi at a media day for his Saudi-backed LIV Golf’s inaugural event in London next month:

"Look, we’ve all made mistakes and you just want to learn from those mistakes and how you can correct them going forward."

Part of rectifying a mistake is accepting responsibility and taking accountability for one's action.  The Prince of Thuggery has done nothing in that regard.  If Greg Norman has an inside information about the murder he should inform authorities. 

Update 6-6-22:  The Shark went name calling golfers who chose not to affiliate with a Saudi backed golf tour.  Greg Norman called Jack Nicklaus a "hypocrite" and.Rory McIlory "brainwashed".

Greg Norman, the public face of the breakaway LIV Golf series (sponsored by Saudi Crown Prince MBS' Public Investment Fund), says the executives and agents who currently run golf “are conspiring against LIV to protect an antiquated system that prevents golfers from realizing their own power and worth amid a global movement of athlete empowerment.”

As for antiquated social systems in Saudi Arabia that don't involve the murder of a U.S. journalist:

Reports emerged that the women activists who pressed for the policy change had been arrested and imprisoned. As of this morning, 13 are reported to have been arrested; most are women. Apart from the driving issue, they have campaigned against so-called guardianship rules which require Saudi women to receive permission from a male relative before making many life decisions, like traveling. 
Update 8-16-22:  Bad leadership world wide means lots more opportunities to get one's undies in a wad and resort to violence.  Trump's undies have a quick wad trigger that unleashes his ceaseless retaliatory impulse.  
 
A Saudi woman studying at Leeds University was sentenced to 34 years in prison for using Twitter to follow and retweet activists and dissidents.  The World Economic Forum ran a piece on using AI to reign in abuse on the internet:

By bringing human-curated, multi-language, off-platform intelligence into learning sets, AI will then be able to detect nuanced, novel online abuses at scale, before they reach mainstream platforms.
I imagine the Crown Prince would be most interested in such technology. 

Update 8-17-22:  The Saudi Crown Prince already has such an app.  Someone "reported her on the Saudi app, which is called Kollona Amn, or We Are All Security."

Her alleged crimes including using a website to “cause public unrest” and “assisting those who seek to cause public unrest and destabilise civil and national security by following their Twitter accounts” and by retweeting their tweets.

The World Economic Forum welcomed the Saudi Crown Prince in 2018 and now appears to endorse something similar to his security app. 

Update 9-14-22:  Trump's Sterling, Virginia golf course will host LIV Golf in May 2023.  It will be the third LIV event at a Trump owned course. 

Rubenstein Rubs Crypto Lamp


Billionaire David Rubenstein said the crypto "genie is out of the bottle."  Rubenstein said crypto was "here to stay" in May 2021 after investing in Paxos through his family office in 2020.  The Carlyle Group co-founder's three wishes are for more money, more money and more money.  

Rubenstein believes the U.S. government and/or Federal Reserve Bank will offer more stimulus.

"Many people are going to look at whether the US economy is now going to be needing some stimulus. It was growing back after COVID, but now it's going to be stalling a little bit because of Russia." 
Heaven forbid Carlyle affiliates refinance their debt at higher interest rates.  

"The Fed is doing the right thing, but as we do begin to increase interest rates, it will slow down the economy. And when you have inflation and high interest rates, that's not a good combination."

The greed and leverage boys have one of their own as Fed Chair.  Jay Powell will continue to look out after his own.  

"Russia-Ukraine is something that's top of mind for me, because as the global economy was beginning to recover from COVID, we now find ourselves in a free-fall a bit, in terms of the global economy."

Carlyle has Admiral James Stavridis as Vice Chair Global Affairs to read the PEU tea leaves.  David Petreaus does the same for KKR.  Both have been on the airwaves discussing the war.  Neither mentioned their private equity underwriter (PEU) ties as they advised the American public.  

David Rubenstein knows about releasing genie's into the world, as private equity may be the most widespread and nearly invisible group influencing the U.S. government.  The PEU boys always get their wish.

Update 4-13-22:  Blackrock is now a strategic partner with crypto payments company Circle, which applied to be a national bank.  FDIC backing, Treasury window?

 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 5-18-22: The cryptocurrency unwind came quickly after financial whores Bill Clinton and Tony Blair were in the Bahamas pushing crypto. 

If you don’t see that the crypto “industry” has become just as blindingly corrupt, just as oozingly fatuous, just as profoundly captured by the Nudging Oligarchy as the traditional financial services industry it was supposed to replace … well, you’re just not paying attention.

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:   Wolf Street writes:

Stuff blows up because of leverage and cascades through the crypto space because everything’s interconnected.

Update 7-11-22:  Crypto hedge fund Three Arrows Capital founders are AWOL.  Creditors asked a court to "subpoena the founders and have them provide a list of company assets including wallets it controls, bank accounts, digital assets in its possessions, derivatives contracts, securities, accounts receivables, and all company records."

Update 8-2-22:  FDIC insured banks ran with the crypto devils and may go under as a result.  How this is remotely OK is a question one should ask David Rubenstein and his former employee Jerome Powell/

Friday, April 8, 2022

Retail Investors Have Access to VC Funds in Canada

Canadian retail investors have access to venture capital funds through WealthSimple.   WealthSimple Venture Fund I is a venture capital and growth equity fund.  

WealthSimple partnered with Accolade Partners and will invest in VC offerings from Accel, Andreessen Horowitz and Kleiner Perkins.  Investors can put up as little as $5,000 but will have to hold the investment for the life of the fund (10 years estimated). WealthSimple's timing is interesting as financial markets are straining under rising interest rates. 

 WealthSimple investors will pay two middlemen in addition to the venture capital firm.

Investors will pay a management fee of between 0.4 per cent to 0.5 per cent, plus the cost of the underlying security.

For the VC fund, those underlying costs include three layers of fees: a fund administration fee covering costs of about 0.2 per cent; incentive fees paid to Accolade of about 10 per cent; and fees paid to the underlying fund managers – the VC and private equity firms – which could include up to a 2-per-cent management fee and 20-per-cent incentive fee. Like most VC funds, incentive fees are only paid if returns exceed a certain threshold, and the fee only applies to returns, not the total investment amount.

 Investors will be robo-advised.

Clients will be able to invest in the fund through the company’s robo-adviser platform, Wealthsimple Invest.

High fees and a robo-advisor, who wants in?  Their website states it can make someone into a financial genius in less than 45 minutes.  Pardon my skepticism WealthSimpleton.

Thursday, April 7, 2022

Red Team PEUs to Disrupt Party


NYT
reported how the greed and leverage boys want to reshape the Republican Party landscape.  Peter Thiel is a private equity underwriter (PEU) and Rebekah Mercer is the daughter of hedge fund pioneer Robert Mercer.

A new coalition of wealthy conservative benefactors that says it aims to “disrupt but advance the Republican agenda” gathered this week for a private summit in South Florida that included closed-door addresses from former President Donald Trump and an allied Senate candidate at Trump’s Mar-a-Lago club, according to documents and interviews.

The coalition, called the Rockbridge Network, includes some of Trump’s biggest donors, such as Peter Thiel and Rebekah Mercer, and has laid out an ambitious goal — to reshape the American right by spending more than $30 million on conservative media, legal, policy and voter registration projects, among other initiatives.

The PEU boys want to continue their ready access to elected officials in order to have their will instituted into law.  Yes, America's policy making billionaires want to hold onto and grow their power, their outsized holdings and keep their preferred tax status.  

In 2017, it emerged that Thiel had been granted citizenship by the New Zealand government In his citizenship application, he said he’d found “no other country that aligns more with my view of the future than New Zealand.”
Does that means he is using the United States, his home country? 

Politicians Red and Blue love PEU and increasingly, more are one.  Virginia just elected one as governor and two of Peter Thiel's PEU employees are candidates for the U.S. Senate.  

Update 4-8-22:  PeterThiel disrupted Warren Buffett's image at the Bitcoin confab in Miami.

Billionaire entrepreneur Peter Thiel on Thursday called billionaire investor Warren Buffett a top “enemy” of bitcoin and part of a “finance gerontocracy” that has held back the cryptocurrency’s adoption.

Bitcoin BTCUSD could have a market capitalization that matches the $12 trillion gold market and even the $115 trillion public equity market, Thiel said at the Bitcoin 2022 conference in Miami on Thursday. 

But a group that the outspoken venture capitalist referred to as the “finance gerontocracy” has suppressed bitcoin’s adoption, said Thiel, who called Buffett a “sociopathic grandpa from Omaha.”

What's wrong with Bitcoin given derivatives are doing just fine without Buffett's endorsement or use?

Update 8-18-22:  A local council denied Thiel's application to build an 18 acre series of buildings in their New Zealand community.   His sprawling lodge community will have to go somewhere else.

Wednesday, April 6, 2022

Davos in 45 Days

The annual meeting of global tamperers, greedy executives and subservient politicians will be held in Davos, Switzerland from May 22-26.  Corporate executives and private equity chieftains buzz in on private jets in search of dislocation to lever.  In 2022 they haven't had to look far.  Dislocation is everywhere and it stands to take down a precariously situated affiliate or two.  

KKR's General David Petreaus and Carlyle's Admiral James Stavridis are working overtime to sort out global changes for their respective private equity underwriters (PEU).  With crisis comes opportunity.  That means gunning for outsized PEU profits. 

Davos deals historically involved gobs of money triggering absurd levels of executive and PEU compensation.  2022 may be different as interest rates rise and inflation blows a hole in the common person's finances, the engine of the U.S. economy.  

Rising rates make rolling over PEU affiliate debt more challenging.  The Carlyle Group is pushing its second Credit Opportunities fund to buy discounted corporate debt.  One way to garner new affiliates is through bankruptcy.  Carlyle took over Mrs. Fields and Brintons' in such a manner.  Brintons' founding family had nothing nice to say about Carlyle in 2011.  I'm sure Brintons' pensioners felt likewise.

The promise of globalization was cheap goods would extend your dollar further.  That made decades of no to minimal raises more tolerable.  All along the way globalization players (corporate executives, politicians and the finance industry, including PEUs) found ways to enrich one another massively.  Thus, they are in position to weather the inflation storm and offer ridiculous, insensitive statements on a widespread basis.  

That bill of goods is long gone and a number of people I know are severely struggling to get by.  Homes are being turned over to banks.  Cars are repossessed.  Health insurance is unaffordable, so risks must be taken.  

The World Economic Forum Annual Meeting will provide the opportunity to learn where global tamperers have migrated in their thinking.  They pretended to be concerned about income inequality, but the problem has magnified under their watchful eye.  

Just as friends are handing over car and house keys to creditors, will the PEU boys do likewise with affiliates?

Update 4-7-22:  The theme for Davos is "The Great Narrative."  I've seen leaders use narratives, i.e. lies and distortions, to enhance their wealth and personal power, regardless of harm to others.  The theme for the annual gathering of global tamperers should be "The Selfish and their Great Manipulation."  

Globalization failed on its promise to provide an endless supply of cheap goods.  Technology will fail to solve our planet's greatest problems because our issues are based in broken relationships (selfishness, greed, arrogance, inequity, dismissiveness, and inability to listen).  Automating toxic human interactions for the sake of money is the singular achievement of most tech.  

Update 5-5-22:  The PEU "public pension savior" narrative may burst if one New York Assemblyman gets his wish for PEUs to reveal their contracts and fee arrangements with New York's public pension funds.  

Update 5-18-22:  Three days until the Swiss gathering of global tamperers.  The WEF description of the meeting includes:

Against a backdrop of deepening global frictions and fractures, it will be the starting point for a new era of global responsibility and cooperation.

Hardly.  The Davos crowd is mostly there to be seen and conduct deals.  Greed for more money and more power, that's the lot that attends.

Credit Stress? Carlyle Group to Take Advantage


Reuters
reported:

Carlyle Group Inc said on Wednesday it has raised $4.6 billion for its second credit fund that provides debt financing to companies, including family-owned businesses and private equity-backed firms.

The new fund, Carlyle Credit Opportunities Fund II, exceeded its initial target of $3.5 billion and is expected have up to $6 billion to deploy when accounting for its ability to borrow.

Rather than buy out the equity Carlyle has been known to buy discounted debt of family-owned companies and force them into bankruptcy.  

Flashback to September 2011 when The Carlyle Group backdoored British carpet maker Brintons'.

In early September, Carlyle Strategic Partners, a global fund, acquired the roughly £18m of senior debt of struggling Brintons and launched what is known as a pre-pack administration. In these proceedings, a company is put into, and bought out of, administration quickly, reaching terms with all creditors. 

Carlyle's credit opportunity arose from buying £18 million in Brintons' debt from Lloyd's Bank.  

The chairman of the Brinton’s family council has spoken out in the wake of the buyout, saying the deal went through without the consent of the family shareholders, who have lost their investment.  “It was taken from under our feet without our consent.”

Carlyle dumped Brintons' £10 million pension obligation on the Pension Protection Fund.  Carlyle did not refund the Pension Protection Fund when it recapitalized in 2015 or when it exited Brintons' in 2017.  Carlyle sold the company to Argand Partners for an undisclosed sum.

Ian Jackson, Managing Director and Co-Head of Carlyle Strategic Partners Funds at The Carlyle Group, said: “Brintons has been a solid investment for us, performing strongly over the last 5 years in a competitive global market."
Carlyle's pension dumping cost the Pension Protection Fund £21.5 million and resulted in a 10% cut in retirement benefits for a portion of those covered under the plan.

Carlyle promoted Glenn Youngkin to Chief Operating Officer in March 2011 and he served on its executive committee.  This group would have reviewed and approved calling Brintons' debt, forcing the prepackaged bankruptcy and shedding the employee pension fund.  

Isn't Carlyle supposed to make money for pension funds, not dump them?  I don't understand how Congress sees fit to continue private equity's preferred taxation via carried interest given PEUs obscene level of greed.

Politicians Red and Blue love PEU and increasingly, more are one.

Monday, April 4, 2022

Psaki to Return to Four Job Territory


News reports suggest White House Press Secretary Jen Psaki is ready for her next gig(s).  Prior to joining the Biden White House Press Psaki was in four job territory.  How did she work four full time jobs, one of which was the consulting firm she founded?  It's the money funnel for the politically connected

The Carnegie Endowment for International Peace's website currently shows only full time positions.  


Bryson Gillette does political campaign consulting.  Psaki's term corresponds with major political campaigning for the 2020 election.  

WestExec Advisors and Pine Island Capital filled out the top cabinet jobs in the Biden White House.  

Jen Psaki may leave soon and the money funnel will spin again, maybe at a record pace.

Update 4-9-22:  NBC News staffers are appalled at the hiring of Jen Psaki at MSNBC, believing it would tarnish NBC's news brand.  

Update 4-13-22:  CBS News staffers are similarly appalled at the hiring of Mick Mulvaney.  Mulvaney announced his $1 million hedge fund in December 2020.  It's Exegis Capital.

Saturday, April 2, 2022

Rubenstein's Show Hosts Former PEU Klain

Carlyle Group co-founder David Rubenstein interviewed White House Chief of Staff Ron Klain.  Host Rubenstein's introduction omitted Klain's work as a private equity underwriter (PEU) for Revolution LLC. 

Policy making billionaires can get their phone calls answered by elected officials and be heard directly as non-lobbyists.  Rubenstein did not ask Klain if he has any residual holdings from Revolution LLC like Obama Health Reformer Nancy Ann DeParle did from her time as a PEU.

Klain did not pass on how much President Biden enjoyed his Thanksgiving stay at Rubenstein's Nantucket compound.  There was much unsaid on Rubenstein's PEU to PEU show.  

Update 4-3-22:  CNN's Fareed Zacharia interviewed Carlyle Group's Admiral James Stavridis yet again on Russia's war on Ukraine..  No mention of his PEU ties or Carlyle's war profiteering is a consistent theme.  Rest assured the Admiral is advising Carlyle on global shifts and implications for ensuring grand returns.  David Rubenstein has a long history of mining the political world for big profits for Carlyle.