Sunday, December 31, 2023

PEU Tepper's Latest Tantrum

Carolina Panters owner and billionaire David Tepper threw a drink on a Jaguars football fan.  The NFL is aware of the video.  

Tepper is "completely untouchable as a person of his financial and social stature."  The story went on to say, "When you’re this wealthy in America, this is, sadly, one of the perks afforded to you." 

Tepper is a private equity underwriter (PEU).  Sports Business Journal reported in 2021:

NFL Panthers Owner David Tepper has become the "founding investor for a private equity firm that plans to invest in growth companies, special situations and the media and sports sectors," according to Miles Weiss of Bloomberg News. 

The firm, Andalusian Private Capital, was "co-founded by one of Tepper’s most trusted execs," Jeffrey Kaplan, who "helped his one-time boss make the record-setting" $2.3B acquisition of the Panthers. 

Andalusian, with about $800M in assets, "will invest on behalf of Tepper and more than 10 family offices who are banding together to do their own transactions rather than committing capital to private equity firms." 

His financial machinations include declaring bankruptcy for the Panthers new practice facility in Rock Hill, South Carolina.

The PEU boys have been pissing on little people for decades.  Was Tepper's drink a Mountain Dew?

Update 1-4-24:  The NFL fined Tepper $300,000.  In a statement he attributed his behavior to "being passionate" about his team and said he regretted it.  Some people regret being caught.  It's not clear if PEU Tepper fits into this group.

Thursday, December 14, 2023

FDIC Ushers in Alternatives Era with BX

The unwanted loans from failed Signature Bank landed in a public private partnership.  The private portion includes Blackstone, a storied private equity underwriter (PEU), and a Canadian pension fund.  The public side is the Federal Deposit Insurance Corporation (FDIC).

The FDIC press release stated:

Hancock JV Bidco L.L.C. (Hancock), an entity indirectly controlled by Blackstone, Inc. and other investors, paid $1.2 billion for a 20 percent equity interest in SIG CRE 2023 Venture LLC (Venture), a newly formed entity wholly owned by the FDIC–Receiver. The FDIC–Receiver will retain an 80 percent equity interest in the Venture. The FDIC–Receiver contributed to the Venture approximately $16.8 billion in CRE loans collateralized by office, retail and market–rate multifamily properties.

Hancock will be responsible for the management, servicing and liquidation of the Venture’s assets. Hancock will also be required to manage the portfolio.

And what fees will Blackstone/Hancock earn on the management. servicing and liquidation of SIG CRE 2023 assets?

The public side put up cash for the JV.

..the FDIC–Receiver provided financing equal to 50 percent of the Venture’s value..

PEUs backing failed banks?  The FDIC hasn't been this generous since Sheila Bair gifted BankUnited to The Carlyle Group, Blackstone, Centerbridge and WLRoss. 

It is the era of alternatives, complete with a campy holiday message blatant PEUmmercial.

Youngkin's Potomac Yard vs. Harbor Island

Virginia Governor Glenn Youngkin announced plans for the public to subsidize yet another billionaire via a new sports facility.  The beneficiaries are Washington Capitals and Wizards owner Ted Leonsis and his fellow partners, many of them private equity underwriters (PEU).

The project "will be financed through a proposed Virginia Sports and Entertainment Authority, which the General Assembly will be asked to approve in January. The authority would buy the land for the district from JBG and develop its portion of the project."

Youngkin was co-CEO of The Carlyle Group when it abandoned its lead developer role for the planned Corpus Christi port expansion, another public-private partnership.   There was no fanfare when Carlyle dumped the Harbor Island expansion on its partner The Berry Group.  

Potomac Yard will be rebranded National Island in the redo.  It would have been too rich for it to be named Harbor Island.  Nobody runs faster from failure than Glenn Youngkin.

Politicians Red and Blue love PEU and increasingly, more are one so they can take public money and steer it to their peers.

Wednesday, December 13, 2023

Shuttered Smile Direct Club: CDR Affiliate

Forbes reported:

SmileDirectClub shut down operations last Friday, leaving patients confused about the future of their dental health—and their payment plans—but the company advised customers to seek future care from local dentists, continue making payments for their treatments and said the status of refunds is still in limbo.

Surprised?  Private equity underwriter Clayton, Dubilier and Rice wasn't.  CDR trimmed their SmileDirect stake beginning with the company's IPO.

Nashville Post reported on CDR selling its remaining stakes: 

A New York-based investment firm that in 2021 was SmileDirectClub’s largest institutional shareholder has dumped the remainder of its holdings in the Nashville-based dental company.

PEU ownership seems bad for dental care.  The Carlyle Group bankrupted Church Street Dental and now CDR backed SmileDirectClub produced lots of frowns.  

A U.S. Senate Committee may wish to broaden the scope of their inquiry into damage done by PEUs in the healthcare arena.

I don't expect them to given politicians have been an accommodating lot for the greed and leverage boys.  Politicians Red and Blue love PEU and increasingly, more are one.

Tuesday, December 12, 2023

Meanwhile is Crypto PEU

The Block reported:

Meanwhile Group, a Sam Altman-backed crypto startup, has launched a bitcoin private credit fund via its investment management subsidiary Meanwhile Advisors amid the ongoing crypto rally.

Fund principals are based in Austin, Texas.  Fees are remarkably similar to private equity underwriters (PEU).

Why would someone with access to AI want to back a bitcoin private credit fund?  Surely Mr. Altman knows the dirty role bitcoins is playing across the globe.

The man who wants you to trust his artificial intelligence offerings wants you to put your retirement kitty into a fund targeting a 5% return on bitcoin holdings.  

Net out the 2% management fee and the 20% carried interest (one fifth of five percent is one percent) and investors end up with a 2% annual return.  

I don't see real people putting money into Meanwhile.  The Silicon Valley "live forever" crowd may invest but they aren't known for their loyalty.  A company press release stated:

In the coming months, Meanwhile Group aims to develop a comprehensive range of financial products denominated in cryptocurrency, including term life insurance and accidental death coverage in BTC.

And how many state insurance regulators are going to allow such products?

Meanwhile may wish to offer ransomware coverage.  They'll have what the crypto-crooks want.  Anonymity.  Speed.  Access.  Bitcoin.

Update 12-13-23:  FASB (financial watchmen) turned away from bitcoin crime with a crypto update to their accounting standards.  The update includes:

  1.  Meet the definition of intangible asset as defined in the FASB Accounting Standards Codification® 
  2. Do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets   (what about dollar or gold backed crypto?)
  3. Are created or reside on a distributed ledger based on blockchain or similar technology 
  4. Are secured through cryptography 
  5. Are fungible  (until they are not)
  6. Are not created or issued by the reporting entity or its related parties. 

What about an investment in a crypto credit fund like Meanwhile which has many related parties?

Update 1-4-24:  Fourteen firms hope the SEC approves their applications to offer Bitcoin ETFs.

Thursday, December 7, 2023

Rapidly Rising Pharma Price for Lead Poisoning Drug

CNN Health
reported that yet another pharmaceutical company took an old drug and jacked up the price for manufacturing the product.

The new version costs almost 10 times as much as the imported version, about $32,000 per course of treatment.

Rising Pharmaceuticals received FDA approval in August for the drug.  Many gross pricing situations are associated with private equity underwriters (PEU).  Rising's sponsor is H.I.G. Capital.  

Generics Bulletin reported:

December 2021:  Through a transaction valued at approximately $56.4m, the private equity giant H.I.G. Capital has acquired Suven Pharma’s 25% stake in Rising Pharma Holdings.

The company's press release stated:

Rising Pharmaceuticals develops and markets generic and specialty branded pharmaceutical products across various therapeutic categories. The Company employs an asset-light model with a fully outsourced third party network, which provides robust capabilities across multiple dosage forms. With a diversified portfolio of over 125 products and the ability to quickly commercialize complex molecules, Rising Pharmaceuticals is strategically positioned in the U.S. pharmaceuticals market. H.I.G. has partnered with Vimal Kavuru, CEO of Rising Pharmaceuticals, to continue the Company’s strong track record of growth and to support new initiatives, such as M&A and new product launches.

H.I.G.’s investment in Rising Pharmaceuticals represents its latest transaction in the pharma services sector. Other active H.I.G. pharma services investments include Aspire Pharma, BioVectra, Leiters and Taconic BioSciences.

The impact of the huge price rise is hospitals cannot afford to stock the lifesaving drug.  

The greed and leverage boys infected healthcare decades ago.  PEU Report did numerous posts on KKR-HCA, Carlyle Group-ManorCare,  President Obama's PEU healthcare reformer and surprise medical billing (PEU sponsored).

Famed investor Marc Cohodes noted:

Senators launch bipartisan probe of private equity's growing role in U.S. health care.

It's about damn time.  The PEU infection has gone on so long the system may be septic.

Wednesday, December 6, 2023

Wizards of Crypto


Former FTX CEO Sam Bankman-Fried invested in Paxos, as did Carlyle Group co-founder David Rubenstein (through his family office Declaration Partners).  Paxos recently won approval for stablecoins in Dubai, as well as Singapore.

When Rubenstein interviewed SBF in September 2022 neither man disclosed their Paxos investment, nor did they share that SBF asked Rubenstein to invest in FTX.  FTX imploded in November 2022.

Rubenstein later shared SBF's investment proposal wasn't PEU grade.  PEU stands for private equity underwriter.    

The public has soured on cryptocurrencies with nearly twice the number of people believing crypto is mostly harmful vs. beneficial to society.

CryptoNews reported:

Paxos, a New York-based regulated blockchain firm behind stablecoins PYUSD, BUSD and USDP, appears to be the entity that overpaid $500,000+ to move just 0.074 BTC (~$1,911 at that time) to Binance. reported:

On Thursday, August 17, 2023, the Dubai-based digital currency exchange Bybit said it will list Paypal’s new stablecoin, PYUSD.  Paypal’s partnership with Paxos Trust Company “underscores the rigorous regulatory approach and commitment to compliance, which are paramount in this evolving landscape.”

UnchainedCrypto reported:

Nasdaq-listed Coinbase alerted users to a subpoena it received from the U.S. Commodities and Futures Trading Commission (CFTC) concerning crypto exchange Bybit.
...Coinbase said it would be forced to respond to the CFTC with information on those users’ exchange accounts. So far, it appears that the recipients of the email were customers that interacted with the Bybit exchange from their Coinbase accounts.
Bybit, an exchange headquartered in Dubai, does not legally offer its services to users based in the U.S.

BlockchainDXB reported:

Since Monday, Paxos, the issuer of the $16 billion Binance USD (BUSD) stablecoin, has burned more than $700 million of BUSD tokens. Paxos Treasury crypto wallet transferred $703 million worth of BUSD tokens to a burn address within 27 hours starting Monday morning, essentially removing the coins from circulation.

In the fall of 2022, Bloomberg reported that Circle complained to the New York State Department of Financial Services that blockchain data showed that Binance did not have enough reserves to back up the BUSD tokens it had issued through Paxos. Binance reportedly supported $1.7 billion of BUSD using collateral worth only $100 million.

The Justice Department recently announced:

Binance Holdings Limited (Binance), the entity that operates the world’s largest cryptocurrency exchange,, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).

“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”

So who is behind the curtain trying to save this nonsense? 

Lobbyists, law breakers and PEUs oh my....

Update 12-7-23:  FT reported:

...Binance has used aggressive tactics to solicit people to use its services in some of France’s most deprived areas.

There's always a mark.

Update 12-14-23:  Unlimited Hangout reported:

In 2022, Bank Leumi was the first Israeli bank to enable crypto trading. They partnered with the U.S.-based company, Paxos because “the company holds several licenses to operate with Bitcoin, altcoins, and blockchain technology…[and] has managed to consolidate important partnerships with PayPal, Revolut, and the Bank of America.” It’s worth noting that, a few years ago, Bank Leumi was under investigation for helping many diaspora Israelis launder their money and eventually admitted “that it conspired to aid and assist U.S. taxpayers to prepare and present false tax returns to the Internal Revenue Service (IRS) by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world.”

Update 1-3-24:  No word yet on Paxos handling Rick Flair's brand spanking new Wooooo!Coin

Tuesday, December 5, 2023

Monied Voices Win Over and Over

The voiceless hoards expand in numbers every day, minimized by the politically powerful super rich.  Even rich and popular professional golfers had no say in a bizarre deal the PGA reached with a Saudi owned rival golf tour.

At Harvard University:

"corporate interests are undermining research and academic freedom to the detriment of the public."

Harvard produced many of the politically powerful super rich   A fired researcher referred to the Facebook documents revealed by whistleblower Frances Haugen:

"I believed, honestly, that these were the most important documents in internet history,” Joan Donovan said in an interview Monday. “Our role as academics is not to play favorites. It’s not to do P.R. It’s to tell the truth, no matter how uncomfortable it makes us. And unfortunately, I lost my job for it.”

Anyone who has worked for a private equity underwriter (PEU) knows "death by a thousand cuts."  The researcher claimed Harvard executives:

“made it so that I couldn’t hire and I couldn’t start doing projects,” halting her fundraising, barring her from holding conferences with more than 30 attendees, and preventing her from launching "a podcast because he didn’t want to, quote unquote, raise my public profile.” She said that led her to halt media interviews and publish opinion pieces.

“Our plan was to go at the elections in 2024," Donovan said. "I had raised. $4.5 million at one point so that we could do our work through 2024.”

A Charlotte sports reporter wrote in a column:

that Tepper is a “hedge-fund billionaire with no clue as to how to run a football team.”

For that he was shunned in a press conference 

“I’m very unhappy w/the Panthers for getting frozen out of asking a question at the David Tepper press conference,” Fowler tweeted. “Sat in front row; raised hand high; wasn’t called on; protested to no avail. Felt like it was purposeful.”

Tepper does know how to take public money.

_____ doesn’t want to be challenged. ______ doesn’t want to be tested. Those who are assigned with protecting him probably don’t want to get chewed out after the fact for giving (as _______ might say) “that asshole small person” a chance to try to embarrass ______ publicly.

The pattern is a few people with obscene amounts of money are going to determine things.  The rest of us are on a ride and it could very well throw us off.

Update 12-31-23:  David Tepper threw a drink on a Jaguars football fan.  The NFL is aware of the video.  Tepper is "completely untouchable as a person of his financial and social stature."

A story went on to say, "When you’re this wealthy in America, this is, sadly, one of the perks afforded to you."  The PEU boys have been pissing on little people for decades. 

Update 1-4-24:  The ultra wealthy hold assets that produce very little in tax revenue.  They also seem quite skilled in getting public funds to subsidize their enterprises.

Monday, December 4, 2023

Arrested Former Diplomat is PEU

The Guardian

A former American diplomat who served as US ambassador to Bolivia has been arrested in a long-running FBI counterintelligence investigation, accused of secretly serving as an agent of Cuba’s government.

Manuel Rocha, 73, was arrested in Miami on Friday on a criminal complaint and more details about the case are expected to be made public at a court appearance on Monday

Rocha is on the board of Clover Leaf Capital Corp, which began as an SPAC under the sponsorship of Yntegra Group, an investment group specialized in private equity and high yield transactions.

Private equity underwriters (PEU) brought us "policy making billionaires" and non-lobbyist lobbying, where those billionaires received preferred access to elected officials.  Did Mr. Rocha get ahead of himself in advocating for Cuba?  Did he assume he could just meet with elected officials like Carlyle's David Rubenstein and Blackstone's Stephen Schwarzman?

Clover Leaf Capital's initial SEC filing in April 2021 included the following:

Ambassador Manuel Rocha, will be one of our Independent Directors upon the effective date of this offering. Before moving to Miami in 2002, he spent well over two decades as a US diplomat. His last post was as US Ambassador to Bolivia from July 2000 to August 2002. His Foreign Service career included assignments in the Dominican Republic, Italy, Honduras, Argentina and Cuba. Importantly, he was also Director of Inter-American Affairs in the National Security Council at the White House. Making the transition to the private sector, he worked for two law firms, established his own business development company bringing business opportunities from China to the Western Hemisphere, worked for a private equity firm based in Argentina, and headed Corporate Affairs for Arcos Dorados, which owns most of the McDonald’s restaurants in Latin America. All of this before serving as President of BARRICK Gold’s subsidiary in the Dominican Republic from September 2012 to April 2018, which represented the largest foreign direct investment in the country exceeding 5 billion dollars. Since May 2018, he has served as the SVP for Global Corporate Affairs for XCOAL, one of the largest exporters of US origin coals for use in integrated steel mills, cement plants, and power plants throughout the world. He graduated cum laude from Yale University, earned a master’s degree in Public Administration from Harvard University and a Master’s in International Relations from Georgetown University.

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.

Clover Leaf signed a promissory note for nearly $1.4 million with sponsor Yntegra.  Did the same person sign both sides of that deal?  That would hardly be arm's length.  PEUs are not known for being above board.

In 2022 Rocha rejoined a Miami law firm, Foley and Lardner LLP.  Their announcement stated:

Ambassador Rocha also brings extensive insight into the hospitality and leisure, private equity and family office, and lobbying and strategic communications industries across Latin America, Europe, and Asia.

The firm's website no longer includes Ambassador Rocha in its people list.  Odd, given how highly the Foley and Lardner thought of Rocha just months ago:

"The addition of Ambassador Rocha to the Miami office comes at a most opportune time. As Foley continues to expand its presence in the Florida market with the addition of top lateral talent, his geopolitical renown will bolster our reputation for unparalleled client service across the state and into Latin America," said Mary Leslie Smith, managing partner of Foley's Miami office.

"Ambassador Rocha's decades-long track record and high-profile experience handling international relations will be a tremendous resource for our clients – both in Miami and across the globe," said Edward Burbach, chair of Foley's Government Solutions Practice. "His multinational company experience will bolster Foley's existing relationships in Latin America and continue to reinforce and expand the firm's international business offerings."

Surely Mr. Rocha's law firm kept him on the clean side of the law.  Was it his PEU dealings or something else that got him in trouble?  Time and the Justice Department may reveal the answer.

Inclusive Capital Partners to Shutter

reported Inclusive Capital Partners is closing shop, selling assets and returning money to investors.  

Lynn Forester de Rothschild and Jeffrey Ubben co-founded Inclusive Capital Partners in 2020 alongside George F. Hamel, Jr. and Eva Zlotnicka.  

In addition to launching Inclusive Capital Partners, Ubben is also launching the Inclusive Capital Partners Foundation which will be dedicated to executing mission-driven philanthropy, focused on advancing economic, social, and environmental inclusion. 
In 2022 the firm described itself with:

Inclusive Capital Partners, L.P. ("In-Cap") is an SEC-registered Investment Adviser based in San Francisco, California. In-Cap seeks to positively leverage capitalism and governance in pursuit of a healthy planet and the well-being of its inhabitants. In-Cap seeks superior long-term shareholder value through active partnerships with companies whose core businesses either contribute to this pursuit or who are transforming their businesses to become more sustainable.
Times are tough for the greed and leverage boys (and girls).  It's bad when you can't make it with a Rothschild on board.

Sunday, December 3, 2023

Michigan Senate Candidate is PEU

Another private equity underwriter (PEU) is running for the U.S. Senate.  Sandy Pensler is a candidate for the Red Team in Michigan.

A 2018 news story indicated Pensler's previous candidacy for the U.S. Senate. 

Sandy Pensler, a former economics professor at Harvard and Yale, and the owner of private equity firm Pensler Capital.

Pensler Capital lists one current investment, Korex Companies.  A 2009 article stated:

A grueling fourteen-month long strike at the Korex Don Valley plant came to a bittersweet end this week.

This past Monday, the 110 or so striking workers at the port lands-area plant learned that Sanford (Sandy) Pensler - the facility's New Jersey-based owner - has declared bankruptcy.

Susan Broadbent, a 27-year powder packer, concurred.

"How can these things happen and the government (Canadian) not step in? We will never get over this," said Broadbent, whose husband Todd Short also worked there for 27 years.

"This is the worst time of our lives for this to happen."

"It was family here and I'm hoping to put my history here to good use," said Jamieson, who is easily recognizable for his Santa-like beard.

"It's hard to believe one man can do so much damage."

It's not hard when that one man is a private equity underwriter (PEU).  Pensler also worked for Lehman Brothers and legendary PEU Blackstone.

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

Saturday, December 2, 2023

Summers in Position to Create Next Societal Disaster

Former Treasury Chief Larry Summers set the table for the Fall 2008 financial crisis with his contributions toward repealing Glass-Steagall under President Bill Clinton.  That repeal enabled riskier products and unethical behavior within and amongst Wall Street banks.

Artificial intelligence company OpenAI appointed Summers to its board of directors so Larry will have another opportunity to lead society down a more dangerous road.  

Consider Summers' history advising crypto company Digital Currency Group.

In 2016, he began to advise DCG, holding a position that was alternately called senior adviser and advisory board member for over six years.

Flash forward to October 2023:

New York Attorney General Letitia James announced a lawsuit against Digital Currency Group (DCG), its CEO Barry Silbert, and DCG’s bankrupt subsidiary Genesis Global Trading for defrauding investors of more than $1 billion.
And two momentous failures qualifies Summers to provide fiduciary oversight at OpenAI?  Only in a PEU world.

Wednesday, November 29, 2023

Billionaire Boys Talking Up Nikki Haley

A number of billionaires expressed support for Red Team Presidential candidate Nikki Haley.  Citadel's Ken Griffin highlighted her foreign policy experience in a David Rubenstein interview.  Rubenstein is co-founder of The Carlyle Group, a politically connected private equity underwriter (PEU) based in Washington, D.C.  Rubenstein also Declaration Partners, has his family office.

Rubenstein coined the term "patriotic philanthropy" and inspired another, "policy making billionaire."  The Carlyle co-founder interviewed Griffin at Mount Vernon, the home of George Washington, America's first President.  Griffin sounded like he might run for office at the end of his interview.

In another David Rubenstein interview Nikki got the nod from billionaire Bill Ackman, normally a Blue Team supporter.  

The Red Team oriented Koch network is backing Haley.  Former PEU and Red Team Senator Mitt Romney said:

Haley has proved naysayers wrong before “and she’s doing it again." He added: "I think it’s a huge boost for her campaign and may create the kind of momentum she needs.”

Billionaire Ken Langone plans to meet with former South Carolina Gov. Nikki Haley next week.

Billionaire Ray Dalio wants anything other than a "Biden vs. Trump" rematch.  

These guys tend to get their needs met.  We'll see if that happens.  Politicians Red and Blue love PEU and increasingly, more are one.

Update 11-30-23:  JP Morgan CEO Jamie Dimon talked up Nikki as an alternative to Trump.  Former House Speaker and Solamere Capital partner Paul Ryan recommends Nikki Haley.  Solamere Capital is a Boston PEU.

Update 12-8-23:  Linked In co-founder Reid Hoffman made a $250,000 in support of Nikki Haley.

Update 12-9-23:  Ken Langone is now firmly in the Haley camp.

Monday, November 27, 2023

MidCap 400 Index to Include Carlyle

The Carlyle Group will join the S&P MidCap 400 starting November 30.  Carlyle will replace ICU Medical which will drop to the SmallCap 600.

Ironically both Carlyle and ICU Medical expressed interest in buying two Medtronic divisions.  Carlyle is currently under exclusive negotiations with Medtronic for those businesses.  Carlyle hopes to use debt that turns interest payments into more debt.  That's like a homeowner's mortgage interest being added to the mortgage principal. 

One index deletion involves private equity underwriter (PEU) Clayton, Dubilier and Rice, which is buying Veritiv Corporation.  Aretec Group is acquiring Avantax, which delivers tax-intelligent wealth management solutions for financial professionals.  The PEU boys hate paying taxes.

Index investors can buy a chunk of Carlyle stock, which lagged a different index, according to Pensions&Investments:

Over the last 10 years, Carlyle had a 6.6% annualized return vs. 9% for the DJ US Asset Managers index and 12.3% for the S&P 500 index.

Irony upon irony.

Saturday, November 25, 2023

Hall Suing Oates Suit Over Primary Wave Deal

The Associate Press reported:

Daryl Hall has sued his longtime music partner John Oates, arguing that his plan to sell off his share of a joint venture would violate the terms of their business agreement.

The move quickly prompted a judge to temporarily block the sale while legal proceedings and a previously initiated arbitration continue.

A Nashville chancery court judge issued the temporary restraining order on Nov. 16, writing that Oates and others involved in his trust can't move to close the sale of their share of Whole Oats Enterprises LLP to Primary Wave IP Investment Management LLC until an arbitrator in a separately filed case weighs in on the deal, or until the judge's order expires. 

Primary Wave has four registered investment funds according to SEC filings.  The initial fund had its first sale in June 2016.  In September that same year Primary Wave announced a partnership with BlackRock.

Primary Wave, the leading U.S-based independent music publishing, marketing, talent management and television production company, announced today that it has finalized a new investing partnership with BlackRock Alternative Investors, (a unit of BlackRock, Inc.).

In October 2022 Primary Wave announced a new partnership.  Variety reported:

Primary Wave Music, a top player in the music-catalog and publishing boom, has joined forces with Brookfield Asset Management in a $2 billion deal to invest in music copyrights, the companies confirmed.

Primary Wave can flip investments in its early funds to its newer ones.

Brookfield could also purchase the assets from any of Primary Wave’s existing three funds. Already, the new vehicle has bought over $700 million of music rights from Primary Wave’s first and second funds.

Arm's length deals?  I can't go for that.

PEU deals. layer upon layer. are everywhere.  Say it isn't so.  I'm afraid it is.

Wednesday, November 22, 2023

Xi Dines with PEU Boys

Fresh off warning Chinese Communist leaders to avoid private equity investments, China's President Xi Jinping dined with U.S. business executives.  Private equity underwriters (PEU) included Blackstone's Stephen Schwarzman and KKR's Joseph Bae.  Each PEU ponied up $40,000 for the privilege.

Xi courted American business leaders with soothing messages:

'The number one question for us is: are we adversaries, or partners?' Xi asked during his remarks.

'China is ready to be a partner and friend of the United States,' he assured while explaining that seeing each other as competitors would lead to misinformed policy.

So Xi needs U.S. business investment.  The PEU boys know all about partnership, the limited liability kind.  PEUs love preferred taxation (lower) and strategically placed affiliates (that do alot of government business).

Was Xi warning off Chinese PEUs from poaching deals from storied U.S. firms?  

President Joe Biden is back at the Nantucket home of PEU David Rubenstein, co-founder of The Carlyle Group and family office Declaration Partners. 

The globe is "greed and leverage boy" friendly.  Where will they invest their billions in dry powder?

Update:  FT reported Carlyle will sell its stake in McDonald's China operations for $1.8 billion.

Carlyle has calculated that the deal will make investors more than six times their money, before fees, one of the people said.

Will that entice new PEU investments in China?

Monday, November 20, 2023

Biden Returns to Nantucket for Thanksgiving

Cape Cod Times

President Joe Biden will once again be spending Thanksgiving on Nantucket, continuing his four-decade-long tradition that has seen him evolve through elected positions in public life.

There is no official word from the White House.

The Nantucket Current added:

Nantucket Police Lt. Angus MacVicar told the Current he anticipates there won’t be any changes from President Biden’s visit to the island last year. If that’s correct, it would entail a stay at billionaire David Rubenstein’s compound on Nantucket Harbor, Thanksgiving dinner from Faregrounds restaurant, a visit to the downtown area for dining, shopping and the tree lighting ceremony on Friday, and time with his family.

Carlyle co-founder David Rubenstein has big bets on crypto's resurgence, healthcare artificial intelligence, fintech and defense/security through his family office, Declaration Partners.  He's also the face of private equity's preferred "carried interest" taxation, showing up on Capital Hill every time there is a serious challenge.

While many are outraged by Supreme Court Justice Clarence Thomas' non-declaration of expensive trips gifted by rich friends, consider the rules in place regarding Presidential trips:

When Biden receives free lodging, he’s supposed to disclose it on annual financial disclosure forms that are released publicly each May. The form requires the president and vice president to disclose free lodging worth more than $390. Ethics experts say the “personal hospitality” reporting exception on that form doesn’t cover instances where the homeowner isn’t present.
Historically, Rubenstein only spends twelve days a year at his Nantucket estate.  That means the odds are good that citizens won't see the value of this trip on an annual disclosure form.  Nearby properties rent for $25,000 to $75,000 per week.

David Rubenstein recently interviewed Citadel Chief Ken Griffin at Mount Vernon, the estate of President George Washington.  They did talk about money in politics but viewed the ignorant masses as a larger problem for democracy.  They also discussed the ballooning federal deficit but did not offer to give up their preferred taxation or pay higher income tax rates.

Griffin mentioned Nikki Haley as his preferred Red Team Presidential candidate.  Rubenstein did not cite his horse for the 2024 Presidential race, but rest assured David is poised to benefit regardless of the outcome.  

So few have so much to be thankful for.

Update 11-24-23:  President Biden called for Americans to "put unity above politics" from Nantucket.  The Hill piece did not mention Biden's stay at the Rubenstein compound.  From the Biden cabinet to his Thanksgiving vacation host it's clear the President feels strongly about peunity.

...if capitalism and its moneyed interests are in charge, those excesses inevitably grow to the point where they are able to extinguish democracy and ride roughshod over the common good.

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

Sunday, November 19, 2023

Thoughtful Money Launched

Wealthion followers were shocked when founder Adam Taggart announced his departure.  It happened on Halloween and most considered the move an awful trick.

Adam shared in a Wealthion video that his departure came over "control issues."  He said it was amicable and the parties were working through the details.  That video is no longer available on the site.  


His reasons for leaving are on Adam's new Substack.  They include:

At its core, my decision to leave was all about control. While Wealthion was my brainchild and I ran nearly all aspects of its operation from Day 1, I did not own the company. 

Going independent gives me the liberty to runs things exactly the way I want to for you.

Thoughtful Money is Adam's new baby.  Like Wealthion, Thoughtful Money LLC is a Registered Investment Advisor Solicitor.  Adam makes money by connecting investors to RIAs.

Two of Adam's Substack posts are available without subscribing.  Four videos are posted and only available to paid members.  

A video with Lance Roberts RIA is one of the free posts.  There are hundreds of comments with most appreciative of Adam's and Lance's rapid resurgence.

Everyone has to make a living.  I wish Adam much success and trust he will be upfront about the ways he benefits from Thoughtful Money LLC.  

Update 11-24-23:  Adam's Thoughtful Money YouTube site is up and running.  Video view numbers at the new site (22,000 to 70,000) and Wealthion (4,500 to 20,000) indicate most people followed Adam.  

Update 12-10-23:   In ten hours Adam's interview with Felix Zulauf gets 38,000 views. Wealthion's interview with the Mooch garnered 4,400 views over the last 12 days.

Saturday, November 18, 2023

New PEU Greed Cycle: Capital Pools, Packaged Debt

Private equity underwriters (PEU) charge fees on committed capital, not just on the amount they've invested.  It's a business founded on leverage, political connections and preferred taxation.  

Over the last twenty years private equity exploded as an asset class.  They bought and sold thousands of companies.  PEU founders grew so influential the media called them "policy making billionaires."

Several years ago private equity firms began buying insurance companies and steering those pools of capital to their PEU offerings.  This was framed as smart capitalism vs. a conflict of interest.  

Carlyle has raised $2.1 billion in equity capital for Fortitude Re from existing investors.  Carlyle will provide Fortitude Re with M&A, transaction origination and execution, and capital management services, as well as source new growth opportunities.

Fortitude Re will have substantial financial flexibility arising from adjusted equity capital of more than $6 billion inclusive of this capital raise. Including the previously announced acquisition of Prudential Annuities Life Assurance Corporation 

Rising interest rates imperiled the value of PEU affiliates.  Higher rates raised the specter of future bankruptcies should those affiliates not be able to refinance their debt when it came due, either to it being prohibitively expensive or not available at all.  Wiping out all that private equity got the wheels turning.  

What if the PEU boys could package, sell and earn fees on large debt pools, using fund funds to refinance affiliate debt (the ones worth saving)?  It'd be only a few years at higher rates, if Fed Chair and former PEU Jay Powell can knock inflation and rates back down.  

Public pension funds are investing an increasing amount of their capital into private equity offerings, rolling the dice for greater returns.  PEUs have engaged in shady behavior trying to get public pension commitments for their fund offerings.   

The greed and leverage boys are extremely interested in pension and insurance capital pools.  Two moves by IBM in the pension arena may end up helping PEUs.  The first happened last year:

International Business Machines, Armonk, N.Y., purchased group annuity contracts from Prudential and Metropolitan Life Insurance to transfer a total of $16 billion in U.S. pension plan liabilities. The purchases, which closed Sept. 13, transferred the benefit-paying responsibility for about 100,000 retirees and beneficiaries covered by the IBM Personal Pension Plan.
The other happened last week:

"Starting Jan. 1, 2024, IBM is introducing a new company-provided benefit for U.S. employees called the Retirement Benefit Account," company spokesman Tim Davidson confirmed to us in an email. "The RBA will replace current company contributions to the IBM 401(k) Plan." 

IBM under the new plan will still be making contributions to employees' retirement accounts--but it will be forcing them to lend the money back to the company, on terms usually reserved for the U.S. government. 

The move enables IBM to turn debt payments into pension funding, killing two financial birds with one stone and places responsibility for any failure onto the Pension Benefit Guarantee Corporation, i.e. taxpayers.  

"This move will save IBM lots of money," Prince tells me. "IBM won't have to make 401(k) contributions anymore." Those contributions cost the company $489 million last year

I'm sure this excited the PEU boys and they trained their AI models on doing something similar across their affiliates.

There's nothing better than free money backed by the full faith and credit of the government.  Earning fees on that while keeping overvalued assets from imploding.... it's the PEU way.

To sum up, the new PEU greed cycle is packaging debt, selling it and earning fees.  It's also creating and leveraging new capital pools.  Dive in, the water's fine.

Update:  Semafor recently had articles on 777 Partners and their recent PEU buying spree.

Update 11-30-23:  The Department of Justice is investigating 777 Partners use of captive insurance company capital.  Semafor characterized 777 Partners as:

....the little-known firm that’s been investing insurance cash into sports teams and other edgy deals. 
...much of 777’s money comes from various insurance operations, much of it bankrolled by a U.S. insurer whose CEO held significant sway over its operations and, on at least one occasion, received a personal loan from the firm.

As for investing in private credit Porter Collins said to avoid them at all costs.

Update 12-10-23:  The Carlyle Group may play in the pension dump to insurers trend.  Those are big capital pools.

Update 12-14-23:  Seeking Alpha reported:

U.S. private equity firms KKR (NYSE:KKR), Apollo Global Management (NYSE:APO) and Carlyle Group (NASDAQ:CG) are considering separate bids for U.K.-based Pension Insurance Corp. in the runup to a deadline this week, according to a Thursday media report.  

Another capital pool and likely another conflict of interest.

Thursday, November 16, 2023

Former Digital PEU, Red Congressman Santos Clings to Job

A House Ethics Committee investigation excoriated Congressman George Santos for ample evidence of criminal behavior but made no recommendations, despite stating he "cannot be trusted."

Santos claimed to be a digital private equity underwriter (PEU) before winning his House seat.  Ironically, George is in a position to further crypto and digital currencies now that FTX's Sam Bankman-Fried has been found guilty of fraud.  The industry is regrouping and ready for a major push.

Carlyle co-founder and policy making billionaire David Rubenstein has a family office, Declaration Partners.  Declaration has a number of affiliates focused on digital and cryptocurrencies.  

Rubenstein started by investing in Paxos.  FTX's SBF was also an early Paxos investor.  The pair didn't discuss their holdings in a September 2022 Bloomberg interview.

Declaration Partners holds a stake in Varo, an "all digital, fully chartered U.S. bank."  Also in the portfolio, Immutable,  which offers "massively scalable layer 2 blockchain secured by Ethereum."  Rubenstein's family office also believes in Figment, "a blockchain infrastructure provider offering staking services and tools for Web3 developers."  It also has a stake in Solidus Labs, a "platform surveilling and preventing abuses in crypto markets."

That's at least five Rubenstein bets on crypto's ethical recovery.  It would be telling if the winning vote for any cryptocurrency legislation came from George Santos.  I imagine his goal is to ride his term to the end and gather those lifetime benefits.

David Rubenstein stands to help Santos with his lifetime healthcare given Declaration's deep focus on healthcare AI.  Also, Declaration "prioritizes reputation" and may be able to help George once he leaves "public service."  

Once a digital PEU, always a digital PEU?  

Update 11-17-23:  The Ethics Committee report indicated Santos received $250,000 for raising $255 million for A-RU Holdings.  Santos stood to get an additional $750,000 at the conclusion of the project.  The funds were paid to Santos' Devolder Organization via a "capital introduction" contract.  Santos funneled other large political donations through RedStone Strategies LLC.  

Update 11-20-23:  The New Republic had a story on Santos and it ended with:

His biggest mistake was getting elected. His second-biggest was doing corruption the wrong way.

Update 11-21-23:  Santos neglected to accumulate enough money for a proper settlement, like crypto exchange Binance,  Binance settled with the Justice Department according to news sources:

“Binance willfully enabled hundreds of millions of dollars in transactions between American users and users subject to US sanctions. Its platform accommodated criminals across the world who used Binance to move stolen funds and other criminal proceeds.”

The penalty is $4.3 billion, CEO loses his job and pays a mere $50 million

Binance engaged in “consistent and egregious violations” of US law that “allowed illicit actors to transact freely” on the platform and “supporting activities from child sexual abuse, to illegal narcotics and terrorism across more than 100,000 transactions”.

Is the deck cleared for a sparkling crypto future? 

Update 11-23-23:  Coinbase CEO Brian Armstrong noted after the Binance settlement:

“Since the founding of Coinbase back in 2012 we have taken a long-term view. I knew we needed to embrace compliance to become a generational company that stood the test of time”

“Today’s news reinforces that doing it the hard way was the right decision. We now have an opportunity to start a new chapter for this industry.”

New chapter or PEU chapter? 

Some reports out late on Tuesday suggested that Zhao’s deal with the Department of Justice could allow him to keep the majority of Binance’s shares. 

I smell a new Michael Milken.   Forty years from now who'll pull out the pardon pen?  

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

Thursday, November 9, 2023

Chelsea Clinton's NonVC Firm Sponsors Healthcare AI

Fox News reported Chelsea Clinton's latest investment soiree, Metrodora Ventures, is backing a healthcare artificial intelligence company focused on new drug discovery.

BioPhy announced this week it will launch with $4.5 million in pre-seed funding led by Metrodora.
It's not clear if Metrodora Partners I, Metrodora Partners II or a combination of the funds posted the pre-seed money.

Axios reported on Chelsea Clinton's interest in starting Metrodora in 2020 and referred to her startup as a venture capital firm.

SEC filings show Metrodora's first two LP funds are pooled investment funds focusing on equity. 

Neither fund checked the Venture Capital box.  They also skipped private equity.  They did state a portion of the proceeds could go to the General Partner for fees and incentive allocations.

Chelsea is also on the board of Clover Health which came public via a SPAC, sponsored by Chamath Palihapitiya.  Investors are suing Chamath for failure to disclose material information on Clover during the go public process.  SPACs are noted for the outsized proceeds that go to sponsors.

What did Chelsea learn from Chamath that she is putting to work at Metrodora?

Politicians Red and Blue love PEU and increasingly, more are one.  The Carlyle Group appreciates what Chelsea's Dad for the PEU boys in their formative years.  It seems right that Chelsea should play in the same financial sandbox, one where the players don't like to share.