Wednesday, September 28, 2022

Carlyle's Natural Resources Cornerstone Doesn't Count


The Carlyle Group is skilled in creating unique measures that maximize the private equity underwriter's image.  The latest is an emissions report that omits Carlyle's significant ownership position in NGP Energy Capital Management.  WaPo reported:

At the start of 2022, the Carlyle Group, one of the world’s leading private equity firms, published a report on its financial risk from greenhouse gas emissions. Yet something was not in the report.

Carlyle’s largest oil and gas investment, NGP, was not included. A “note on scope” halfway through the document said this was due to a “different business model.”

If energy prices remain high, NGP is on track to earn $1 billion for Carlyle this year. 
Carlyle made the investment in December 2012.  Their press release stated:

Global alternative asset manager The Carlyle Group (NASDAQ: CG) today announced it has added significant capability to its growing global natural resources investment platform. Carlyle has acquired a 47.5 percent revenue interest in NGP Energy Capital Management, an Irving, TX-based energy investor with $12.1 billion in assets under management. Carlyle will pay, at closing, $424 million to acquire Barclays Natural Resource Investments' ("BNRI") 40 percent stake and 7.5 percent from NGP's management. 

The transaction, which will be funded with cash and Carlyle Holdings partnership units, has closed today, December 20. The transaction also includes: a right to purchase an incremental 7.5 percent revenue interest, which would bring Carlyle's total revenue interest to 55 percent; 7.5 percent of the carried interest in all future funds; and options to acquire BNRI's 40 percent interest in the carried interest in NGP's current flagship fund (NGP Natural Resources X, L.P.) and all future NGP funds. 

NGP will serve as the cornerstone of Carlyle's growing natural resources investing platform
NGP is not an official part of Carlyle carbon wise.  This hearkens back to Carlyle running from the carcass of Carlyle Capital Corporation (CCC).  CCC was a highly leveraged mortgage backed security fund sold as a "safe investment."  CCC folded in February 2008.  I'll venture massive investor losses in CCC were never included in Carlyle's top secret investment return formula.  

The more you know about a measure the better you are able to understand what it actually says.

"An operational definition is a procedure agreed upon for translation of a concept into measurement of some kind." An operational definition specifically states how to measure the item being defined. Many difficulties can arise without operationally defined measures.--Dr. W. Edwards Deming

Opaque measures, ring fencing problem results...fudging is the PEU way. 

Update 9-30-22:  FT ran a letter which stated

 ...the path that has worked for private equity, not normally for countries. There are four stages. One, load the victim organisation up with debt. Two, bleed off cash and assets to provide excessive rewards for the inner circle. Three, massage the numbers to flatter the performance of the victim company. Four, get out fast and leave others holding the can.

Monday, September 26, 2022

PEU Unethical Waves


The SEC fined Wave Equity Partners LLC, an ESG oriented private equity underwriter (PEU).  

From May 2018 through October 2020, Respondent caused Fund II to pay certain organizational expenses specified in Fund II’s governing documents, including placement agent fees to a third-party vendor. The placement agent fees that Respondent borrowed from Fund II over this period of time totaled $1,096,443.

Pursuant to the terms of Fund II’s partnership agreement and private placement memorandum, this borrowed money was required to be paid back to Fund II promptly through an offset of the quarterly management fees charged and collected by Respondent for its management of Fund II. 

Respondent did not offset any of the money borrowed from Fund II against the receipt of management fees for 11 consecutive quarters, beginning with the second quarter of 2018 (the quarter ended June 30, 2018) and continuing through the fourth quarter of 2020 (the quarter ended December 31, 2020). Instead of paying back Fund II during this time period, Respondent used the management fees it charged and collected for its own operating expenses. 

From July 2018 to October 2021, Respondent never informed investors and potential investors in Fund II that it had failed to repay Fund II timely and was thereby in violation of Fund II’s governing documents.

Glenn Youngkin was once an ESG fan while co-CEO of The Carlyle Group He flipped his position after winning the Virginia Governor's race.

FT ran another story on PEU continuation deals and conflicts of interest in moving affiliates from one fund to another.  A Dutch pension fund investment professional equated continuation deals with ponzi schemes.

FT also reported that a PEU billionaire lamented that crypto is not as ethical as private equity.   

“I’ve gotten to know that world a little bit more, and some of the business practices don’t rise to the level of ethics that we’re all used to in private equity with your investors and your customers and your community, and that has been a bit disappointing.”

Opaque fees, a history of collusion via club deals, pay for play settlements indicate questionable PEU ethics.  The intense profit pressure put on affiliates frequently causes bad behavior (Carlyle = ARINC, SemGroup, Synagro, ManorCare)

Consider that Carlyle co-founder/crypto fan and policy making billionaire David Rubenstein has access to D.C.'s hallowed halls of governance.  He kept PEU preferred taxation despite widespread public opinion to the contrary.

Failing to meet the already low ethical standards of the greed and leverage boys...that shouldn't be the future of finance, much less its present.

Friday, September 23, 2022

PEU Party in Cannes

The greed and leverage boys gathered along the French Riviera to sell the private equity underwriter (PEU) method of investing.  It's high fee and low tax.  The PEU way leverages debt and political connections for profit.  

When times are good PEU sponsors bleed affiliates with dividend recapitalizations.  When times get tough affiliates can find themselves stressed for operating cash as the greed and leverage boys won't throw good money after bad.  If it gets bad enough affiliates can be cast into bankruptcy.

A newer option is to sell an affiliate to a sibling fund in the same PEU family.

FT reported:

Mikkel Svenstrup, chief investment officer at Denmark’s largest pension fund ATP, used his platform at the conference to compare private equity to a pyramid scheme

He complained about the industry’s use of “continuation funds”, a fast-growing model in which a private equity group sells a company to itself by shifting it between two of its own funds. And he said he was “looking very carefully” at “all those tricks they do to kind of manipulate” returns figures. 

 Bloomberg reported

... continuation funds allow buyout firms -- also known as general partners -- to keep raking in management fees from existing or new clients.

Neuberger Berman is planning to deploy a chunk of the $4.9 billion it has raised for second-hand private equity deals on so-called continuation funds.

Is Neuberger looking for PEU affiliates on life support?  It may find ample opportunities going forward. 

The greed and leverage boys want to open their offerings to the more common investor.   This PEU hunt for cash from individuals is characterized as the "democratization" of private equity.

Common Dreams reported on dark money in American democracy

Proponents of democracy responded with disgust Thursday after Senate Republicans filibustered the popular DISCLOSE Act, which seeks to expose the super-wealthy donors who are spending unlimited amounts of undisclosed money to ensure that the U.S. government advances their interests at the expense of the vast majority.  

PEU founders have long been policy making billionaires.  America's hallowed halls of government have long been occupied by greed and leverage boys.  

Politicians Red and Blue love PEU and increasingly, more are one.  One can keep the PEU party on the Riviera rolling, even as they take their last breath.  

Update 9-26-22:  FT ran another story on continuation deals and  conflicts of interest in moving affiliates from one PEU fund to another.  It also reported that a PEU billionaire lamented that crypto is not as ethical as private equity.  Ah, failing to meet the already low ethical standards of the greed and leverage boys...

Thursday, September 22, 2022

Rubenstein on Jay to Suppress Lee


Carlyle Group co-founder David Rubenstein filled the financial airwaves recently, previewing this week's Fed meeting and offering interpretive commentary after the Jackson Hole event.

Rubenstein advises the New York Fed via his service on the Investor Advisory Committee.  That committee will take up the following questions in October:

What are your expectations for the U.S. economic outlook for growth and inflation? How are you thinking about the trajectory of the U.S. economic outlook relative to other jurisdictions? Which developments have been most important in affecting your outlook?

What is your outlook for Federal Reserve monetary policy and the path of policy? How do you expect monetary policy to evolve internationally? What do you think has driven changes in currency markets recently and what are the potential impacts and implications of these moves?

What are your thoughts on the outlook for Chinese economic growth? To what extent do recent developments, such as conditions in the real estate market, the zero COVID policy, and the upcoming Party Congress affect your view of the near-term outlook. What are key risks further out?

Rubenstein's ubiquitous presence may be an attempt by Carlyle to change the subject from the founders' recent drubbing of former Carlyle CEO Kewsong Lee.

Fed Chair Jay Powell's job is to get the greed and leverage boys their next round of buying opportunities. 

Update 11-9-22:  Carlyle reached a separation settlement with Kewsong Lee:

Carlyle said it will pay Lee $1.405 million as base salary and bonus as well as $1.95 million as stock dividends as a part of the separation agreement that terminates at the end of this year. The Washington, D.C.-based firm also agreed that most of Lee's restricted stock options would be allowed to vest between November and February next year.

 

Thursday, September 15, 2022

Rise of the Salesmen


This morning a CNBC guest called Adam Neumann a "great salesman" but failed to endorse Neumann's latest enterprise in conjunction with Andreesson Horowitz.

Andreesson Horowitz is also behind online brokerage Titan which announced it would offer several private equity options offered by other great salesmen, Apollo Global Management and The Carlyle Group.

Titan and its PEU partners will take fees for their services. 

Carlyle co-founder David Rubenstein recently talked how buying cryptocurrencies is titillating.  Titan can help investors get into crypto and/or private equity products.  

Are you ready to be sold?

Update 9-18-22:  David Rubenstein's show is now on PBS as well as Bloomberg.  Crypto loving Rubenstein (Paxos investor) just put out a book on investing.

Update 9-21-22:  Rubenstein was on Fox yesterday and will open tomorrow morning for CNBC.  Both networks have him talking about Fed policy.  Few mention his advisory role for the New York Fed.

Update 9-27-22:   CNBC reported:

The actively managed Ark Venture Fund invests in 70% private firms and 30% public companies focused on technologically enabled innovation, and selectively in other venture capital funds, Ark Invest said Tuesday. The fund is available initially through investing app Titan to individual investors with a minimum investment of just $500.  Titan is a startup backed by Andreessen Horowitz.  The Ark Venture Fund charges a flat management fee of 2.75%.

Update 10-28-22:  "Surge your wealth" is being sold by evangelical faith leaders.  The faithful can be fee-ed by their leaders.

Wednesday, September 14, 2022

Rubenstein's Titillating View of Crypto


The allure, the privacy, the experience of "happiness and pleasure" are why people invest in cryptocurrencies noted Carlyle Group co-founder David Rubenstein.   One can be like James Bond given:

"There’s a lot of thrill in the secrecy of it, a lot of thrill that nobody knows what you actually own, a lot of Russian oligarchs saw their assets being taken away by Western governments and many other wealthy people around the world are probably saying, ‘well I want to have some assets that nobody can confiscate, nobody knows that I have [them],’ and that’s what cryptocurrencies do."

Rubenstein's family office Declaration Partners has a stake in crypto infrastructure firm Paxos.  I imagine Rubenstein received a capital call from Paxos given crypto's recent swoon.  

Hold me, thrill me, kiss me, kill my portfolio with spreads and fees.... 

Update 9-15-22:  Kim Kardashian of SKKY Capital is looking to date a doctor, lawyer or neuroscientist.  Why not a fellow private equity underwriter (PEU)?  That would be titillating.

Update 10-1-22:  Rubenstein remains a crypto promoter.

Update 11-8-22:  Crypto run at FTX causes sale of FTX's non U.S. business to Binance.

Update 11-10-22:  Bloomberg reported FTX with an $8 billion hole is careening toward bankruptcy.

Update 11-25-22:  FTX imploded in the worst way.  Ruybenstein came out in favor of blockchain technology after saying this of crypto (last week on Fox Business):

"We should be worried because it's very risky, it's very complicated and people don't have the information they would have if it was properly regulated.  It really isn't regulated, and so it's the Wild West to some extent."

"Generally it's a very complicated area, it's not for people who are not professionals," he said.

"I don't think it's going to go away completely, but clearly it's been damaged a great deal and a lot of people are going to be suffering from this."

The article made no mention of Rubenstein's family office investment in Paxos.  Undeclared conflicts of interest are part of the investment Wild West.

 

Monday, September 12, 2022

Carlyle Forms Atmas Health


A Carlyle Group press release stated:

Global investment firm Carlyle (NASDAQ: CG) announced the formation of Atmas Health in partnership with long-time healthcare executives Kieran Gallahue, Jim Hinrichs, and Jim Prutow and Carlyle’s Global Healthcare team.

The formation of Atmas Health is a continuation of Carlyle’s long-term global commitment to the global healthcare sector, in which it has deployed over $22 billion of capital. Carlyle’s significant experience investing in medical products, tools, instruments, and contract manufacturing businesses includes Medline, Ortho Clinical Diagnostics, Resonetics, Unchained Labs, amongst others.
Carlyle's Global Healthcare team makes no mention of ManorCare, the giant nursing home it drove into bankruptcy.   Former Carlyle CEO Kewsong Lee drove the formation of a COVID-19 portfolio.  

With Lee effectively fired Carlyle has turned to outsiders to grow its healthcare portfolio.  Look for this group to leverage federal funds to re-shore pharmaceutical and life science manufacturing. 

KKR's ownership of HCA added billions in unnecessary costs to America's absurdly expensive healthcare nonsystem.  Making healthcare more expensive is the PEU way.

Update 10-10-22:  Hospital anesthesia services  have been made worse by PEU ownership.

But some physicians and patient advocates say the health care investments of private-equity firms and their drive to reap relatively short-term profits are inconsistent with putting patients first. Independent academic studies find that private equity’s laser focus on profits in health care operations can result in lower staffing levels at hospitals and nursing homes.

Higher patient costs, less staffing, placing patients at greater risk for harm and injury...it's the PEU way.

Wednesday, September 7, 2022

PEU Kim K. Partners with Taylor Swift Tormentor


Latest sign of the PEUpocalypse: 

WSJ reported Kim Kardashian and Jay Sammons have formed SKKY Partners, a private equity underwriter (PEU) focused on the consumer sector.  Kim's mother Kris Jenner will be a partner with the firm.  SKKY Partners expects to make its first investment before the end of the year.  Fundraising will begin after global high dollar investors digest the news.

Last month Bloomberg reported Jay Sammons left The Carlyle Group in July.   He was a partner at Carlyle until his departure and responsible for Carlyle cool alongside rapper co-founder David Rubenstein.

Sammons, who’s based in New York, joined Carlyle in 2006 and worked on the firm’s investments in companies including Beats Electronics, Beautycounter, Vogue International, Supreme and Grupo Madero. He was also involved in Carlyle’s bet on Scooter Braun’s Ithaca Holdings LLC, which owned six Taylor Swift albums that the artist has begun to re-record. 

Ye, Jay and Kim K.--all enemies of the Swifties. I guarantee Taylor Swift and her global fans will never put a penny in SKKY Partners.  

Kim K. said she wants to help entrepreneurs.  That can be done without taking an equity stake, bloating them with debt, milking them for management fees/special distributions or slashing staff.  


America has another billionaire who wants to grow their booty (loot and bounty combined into one).  Kim K. can reward family/friends while pinching the little person's pocketbook.  Davos and Milken deals await  It's the PEU rage, darling.

Who needs Pete Davidson when you can run with the greed and leverage boys?  

Update:  Fortune highlighted Sammons record with Beats and Supreme but no mention of Carlyle's making Taylor Swift spin in the wind like Mountain Water.  The piece did say fundraising would be tough.  If only she had a salesman who could make people laugh. 

Update 9-8-22:  Fortune asked why a Carlyle bigwig would leave to startup a PEU with Kim Kardashian.  Why would Bill Clinton and Tony Blair push crypto-trader FTX in an interview with founder Sam Bankman-Fried?  Because there is big money to be made/lost.....

FTX Ventures took a 30% stake in Mooch's SkyBridge Capital.   

Update 10-3-22:  New PEU Kardashian reached her first SEC settlement for promoting a cryptocurrency without disclosing the paid nature of the relationship.  The settlement did not require an admission of guilt.

Update 10-10-22:  LA Rams fan booed Kim K when her image showed up on the Jumbotron.  Is the general public catching on to the destruction done by the greed and leverage boys? 

Tuesday, September 6, 2022

Insitutionalized PEU Greed is Abnormal

 

President Joe Biden said "Too much of what is happening in our country today is not normal.”  To the average American:

  • An ever shrinking middle class should not be normal.  
  • Policy making billionaires are not normal
  • Key government positions are quietly occupied by private equity executives whose greed helped shrink the middle class.  (This applies to both political parties)
  • Politically connected people have multiple, high paying positions while the average person struggles..
  • Maintaining preferred "carried interest" taxation for private equity is a decade old disgrace
  • The distribution of reward is almost exclusively to the top 1%, especially the top 0.1%
  • The Biden Cabinet should not be stacked with private equity underwriters (PEU) who constrained fair pay, stopped raises, limited or eliminated 401(k) contributions and cut benefits at many affiliates.  PEU job elimination was mentioned in the third bullet.

It should be no surprise that citizen anger has to go somewhere as many feel abandoned by leaders who look out for themselves and cover for other insiders.  

Update 9-18-22:  The power to set government policy is becoming increasingly disconnected from public opinion. 

Update 10-19-22:  Policy making billionaires Bill Ackman and Elon Musk recommend democratic Ukraine strike a peace deal with violent, territory grabbing Russia.

Saturday, September 3, 2022

Rubenstein Pans Lee on NYT Dealbook


Former Carlyle Group CEO Kewsong Lee remains under a multi-year nondisclosure agreement while Carlyle insiders tell stories about Lee's management failures.

A Dealbook interview allowed Carlyle co-founder David Rubenstein to bust Kewsong's chops in his usual indirect, manipulative manner.

Rubenstein talked about the longevity of founders --"maybe God loves them" --and suggested a new CEO might want to spend time with them.  

Lee had been with The Carlyle Group for nine years, five as Co-CEO or outright CEO.  He'd experienced a number of performance feedback sessions with Carlyle's board.

Rubenstein said Carlyle's infamous founders were not kept informed, a grievous error given their status at the PEU's biggest shareholder.  He gave a dig at Lee for the stock being in low $30 a share range.  The price was $38 a share before the high level divorce.

So Carlyle didn't have a perfect #1.  How about the #2 guy?  Rubenstein said:

"And we didn't have a perfect #2 there.  That was one of the concerns the board had had for a long time, which is that there should be a person groomed to be a successor.  And there wasn't one groomed."


Recall co-#1 Glenn Youngkin left the firm in Fall 2019.  The board united firmly behind Lee at the point.

"We are fortunate that Kew is extremely well positioned to serve as our CEO, and I look forward to continuing to work closely with him on behalf of all of Carlyle’s stakeholders.”  --David Rubenstein

"The Board is confident that Kew will build on the current momentum that has been achieved and we are excited to watch him lead and support the exceptional global team Carlyle has assembled.” --Bill Conway

COVID hit in March 2020 and Lee spent considerable time building a COVID portfolio of companies with the OneCarlyle team. 

Rubenstein didn't mention the legions of top talent that fled Carlyle, mostly for other private equity firms.  Many exiters ended up at the Federal Reserve Bank as Fed Chair (Jay Powell) or in other senior roles (Randall Quarles).  One became CEO of Nasdaq (Adena Friedman), another CFO of Comcast (Mike Cavanaugh) and another CEO of General Motors (Daniel Akerson).  

When asked if Carlyle would ever sellout Rubenstein responded "it's a publicly traded firm."  Yes, Carlyle buys publicly traded firms all the time.  However, he noted a change of control allows limited partners the right to get out of their specific Carlyle fund(s).  LPs could pull their invested capital and not fulfill further capital commitments.   I would venture a few LPs are unhappy as to how Kewsong was treated and might wish to pull their capital.

Andrew Ross Sorkin asked about  Rubenstein's Family Office (Declaration Partners) and any problems that caused.  The "nearly every billionaire does it" answer did not address Declaration Partners may compete with Carlyle on any deal and is a financial conflict of interest.  

Generous Rubenstein closed his response with he'd referred deals Declaration Partners did not want to Carlyle.  How is a CEO supposed to deal with a board member and founder dumping second hand prospects in his lap?  Lee cannot legally give an answer.

"It's amazing how, if you have a good track record, you can charge almost anything."
That's David Rubenstein near the end of the interview, not Bernie Madoff.   

I'm sure Kewsong Lee felt he had a good track record as Carlyle CEO but founders and the board balked at his request, sent him packing and have been running him down since.  


Oddly, over his nine year tenure with Carlyle there are no public pictures of Kewsong Lee with any of the firm's co-founders (Google image search).  The public faces of Carlyle don't seem to share the spotlight.

Update 9-6-22:  BOA gave a double downgrade to Carlyle lowering its price target from $58 to $33 per share.  "We believe the management change could adversely impact employee retention, fundraising, and CG's business strategy, including M&A and signal risk to prior financial targets/guidance." 

"One upside risk for the stock is Carlyle's $80B+ of dry powder, which the company can invest into a cheaper asset backdrop."  The would be courtesy of former Carlyle managing director and current Fed Chief Jay Powell. 

Update 11-9-22:  Carlyle reached a separation settlement with Kewsong Lee:

Carlyle said it will pay Lee $1.405 million as base salary and bonus as well as $1.95 million as stock dividends as a part of the separation agreement that terminates at the end of this year. The Washington, D.C.-based firm also agreed that most of Lee's restricted stock options would be allowed to vest between November and February next year.

Making Money Off Disadvantaged: Legal and Not


What do poor people in Mississippi have in common with Alaskan Native Corporations?  Both groups were used by people wanting to achieve big profits.

Selling Alaskan Native tax losses to corporations produced the seed money to start The Carlyle Group.  Tax losses or tax credits offset a company's tax liability.    

Between 1986 and 1988, Alaskan Native Corporations sold an estimated $1.5 billion in losses, for $426 million in revenues.  Congress disallowed the practice in 1988.

David Rubenstein used the proceeds from those sales to fund The Carlyle Group, a politically connected private equity underwriter (PEU).  Policy making billionaire Rubenstein recently highlighted the benefits of Carlyle's being in our nation's capital.  The public noticed Congress maintained private equity's preferred "carried interest" taxation yet again.

Mississippi officials steered $2.15 million in federal TANF welfare money to fund a fledgling pharmaceutical company.  The money was routed through a nonprofit agency.  Involved parties believed they would make a fortune from "their" equity investment in Prevacus/PresolMD.

This group of PEU wannabees included Mississippi Governor Phil Bryant, the head of the state welfare agency John Davis, nonprofit leader Nancy New and her son Zach.  On the periphery sat Brett Favre, investor and believer in Prevacus/PresoldMD's concussion reducing drug treatment.  Mississippi Today reported:

Nancy New, a once prominent private school and nonprofit founder, and her son Zach New pleaded guilty to state criminal charges in Mississippi’s sprawling welfare scandal on Friday.
It's not clear how much equity the $2.15 million purchased.  Also, what happened to that stake when Odyssey Group International purchased Prevacus' drug candidate PRV-002, a concussion drug therapeutic compound (mild traumatic brain injury) in January 2021?

The prosecutor looking into the role of peripheral persons (Farve and Bryant) was let go.  Nothing to see here folks, just a few shady bureaucrats and a nonprofit who acted on their own.  Never-mind internal financial controls, audit trails or board of director decisions.

Friday, September 2, 2022

The Climate Money Funnel Giant


Politicians Red and Blue love PEU (private equity underwriters) and increasingly, more are one.  Headlines indicate:

White House National Climate Advisor Gina McCarthy will step down.  No word on whether McCarthy will rejoin Pegasus Capital Advisors.

McCarthy's successor Ali Zaidi represented big oil and private equity underwriters at Kirkland and Ellis before joining the Biden White House.

The Podesta name resurfaced as John Podesta has been appointed Senior Advisor for Clean Energy Information and Implementation.  John will dole out $370 billion while brother Tony lobbies for firms wanting a piece of that ka-ching.

The Blue Lucys are consistent in their alignment with the greed and leverage boys, maintaining their preferred "carried interest" taxation and tapping PEUs for critical government roles.  NYT reported:

Mr. Podesta will lead a task force of cabinet secretaries and the heads of 21 federal agencies that Mr. Biden created when he took office to mobilize the government to confront climate change. Mr. Zaidi will serve as vice chairman.
Many of those cabinet secretaries and agency chiefs are former PEUs.  They likely hold residual PEU stakes not included in their federal financial disclosures (like Obama White House Health Reformer Nancy Ann DeParle).  

Rest assured the greed and leverage boys want a share of that $370 billion.  It's the Blue Lucys vs. the Insane Reds this fall.  Both are beholden to the PEU class. 

“Too much of what’s happening in our country today is not normal.”
Biden pointed out the Insane Reds but avoided the Blue Lucys.  Neither are normal.

Thursday, September 1, 2022

Don't _uck with the Founders


It's difficult to lead in the shadow of politically connected billionaire founders.  Former Carlyle Group CEO Kewsong Lee learned that lesson while negotiating a contract extension with the Board of Directors. 

NYT ran a story on the conflict, citing sources with knowledge of the situation.  It stated:

 "the clash at Carlyle shows, there is little to stop their founders from clawing back power."

Billionaire founders never gave up their ability to direct government policy, especially taxes.  NYT referred to Carlyle co-founder David Rubenstein as "dispensing advice to presidents and senators" instead of undeclared lobbying for his private equity underwriting (PEU) interests.

Issues with Rubenstein got more press in the story.

Another source of friction was Mr. Rubenstein’s so-called family office, which makes multimillion-dollar investments with his personal funds, according to three people familiar with the matter. Mr. Lee and other leaders felt Mr. Rubenstein’s investments were becoming a distraction for Carlyle employees who had to navigate a thicket of rules that were intended to avoid Mr. Rubenstein’s prioritizing his personal interests over those of the firm and its clients.

Mr. Rubenstein represented Carlyle at places like the World Economic Forum in Davos, Switzerland.

Mr. Lee at times grumbled to colleagues about what he saw as Mr. Rubenstein’s attempt to serve as the face and voice of Carlyle.

Carlyle's super-rich white male billionaire founders are not to be messed with.  That's the takeaway from this crafted leak or series of leaks from inside Carlyle.  Kewsong Lee, like Glenn Youngkin, has an NDA he cannot violate.

The industry says it owns companies that collectively employ 12 million U.S. workers, or about 7 percent of the labor force.  

Many U.S. citizens know the harm done by private equity underwriters (PEU).  We've learned that executive changes can install someone even worse.  I imagine that's a current Carlyle employee fear.

Update:  Rubenstein was on CNBC for a half hour today.  He talked about what makes a good investor.  Political connections and access to Uncle Sam's wallet were obliquely mentioned.  He mentioned his cryptocurrency investment without saying his family office Declaration Partners or Paxos.  The billionaire policy maker said Congress will stay hands off on crypto regulation.  He offered his thoughts on China and Europe.  The face and voice of Carlyle remains David Rubenstein.

Update 11-9-22:  Carlyle reached a separation settlement with Kewsong Lee:

Carlyle said it will pay Lee $1.405 million as base salary and bonus as well as $1.95 million as stock dividends as a part of the separation agreement that terminates at the end of this year. The Washington, D.C.-based firm also agreed that most of Lee's restricted stock options would be allowed to vest between November and February next year.