Tuesday, February 28, 2023

Condi Rice PEU Strategist

Face the Nation interviewed former Secretary of State Condi Rice this past weekend.  I wondered if she had any private equity underwriter (PEU) ties. 

In 2012 WaPo questioned if Rice would be the new face of venture capital after her deal with Khosla Ventures.  Private Equity News reported on that same development.  Vinod Khosla is the billionaire who refuses to allow access to a public beach.

In 2016 Rice struck a deal with RWC Partners.  RWC rebranded to Redwheel in 2022.

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

Monday, February 27, 2023

PEU Pendulum's Second Fund

Pendulum Holdings is offering its second private equity fund according to SEC filings.  Pendulum Opportunities Program Vehicle II hopes to raise $350 million with a minimum $10 million investment.  

Related parties include:

Founder Elbert (Robbie) Robinson, financial advisor to former President Barack Obama.

Pendulum Opportunities PV II GP LLC
Pendulum Opportunities LLC
D'Rita Robinson (of same address as Founder Robbie)

Sales compensation will go to:

Pendulum Securities, LLC (same address as Founder Robbie)

BDT & Company, LLC (Chicago)

Pendulum offered their first private equity fund in 2021.  That $250 million fund required a minimum $1 million investment.

The pendulum stuck in favor of the greed and leverage boys since 2000.  President Obama did his part to keep the profit spigot wide open for Blackstone, Carlyle and their PEU brethren.  There are few signs that the pendulum will swing back in favor of the common person.  

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

Peter Clare Taps Out at Carlyle

The Carlyle Group's Peter Clare announced his retirement effective April 30th.  The 57 year old Clare recently was mentioned as a possible CEO candidate for the politically connected private equity underwriter (PEU).

Carlyle hired "streetfighter" Harvey Schwartz for the CEO position.  Schwartz has been in that role for twelve days.

Clare will stop serving as an executive officer and will step down from the board effective immediately.

How did Schwartz get Clare to tap out so quickly?  

Mr. Clare formerly was the Chief Investment Officer of Corporate Private Equity, Chairman of the Americas and Chair of the US Buyout and Growth Investment committees. Mr. Clare also previously served as the Co-Head of the US Buyout and Growth team and as Deputy Chief Investment Officer of the Company’s CPE segment and previously was a member of Carlyle’s Board of Directors from January 2018-February 2023.
It's still February.  Who's next on the list?  

Power disruption and consolidation...it's the PEU way.

Update:  FT's piece on Clare's retirement echoes some of the same themes:

On a call the firm hosted a day after Schwartz’s hiring, Clare ... assured investors in Carlyle funds that they would support the new CEO.

Sunday, February 26, 2023

Schwarzman's $1.26 Billion Pay from Blackstone

Reuters reported Blackstone Group co-founder Stephen Schwarzman received over $1 billion in pay and dividends in 2022.

Forbes pegged Schwarzman's wealth at $2.5 billion in 2006.  They cited his wealth at $28.1 billion in 2023.  Forbes didn't say how the Trump tax cuts helped boost his wealth over 11x. 

That thumb's up is a bipartisan one for the Red and Blue political teams keeping private equity's preferred taxation in place over that period.  Elected officials did so in direct opposition to public opinion.

Update 3-1-23:   For more on how Schwarzman shafts the little people.  He can do it directly by increasing rents nearly double the national average, evicting renters or indirectly through pension investment fees.

Saturday, February 25, 2023

Fellow PEUs Support Banga for World Bank

The club for greed is rallying on behalf of President Biden's World Bank nominee Ajay Banga.  Former Carlyle Group managing director Afsaneh Beschloss expressed her support for fellow private equity underwriter (PEU) Banga.  At the time of her hiring at Carlyle Beschloss was treasurer and chief investment officer of the World Bank.  Beschloss left Carlyle to start Rock Creek Group in 2003.  

The firm is a leading global investment and advisory firm, active in emerging markets, alternatives, private equity and impact investing. 
Beschloss bio can be found under a number of global tampering organizations that cater to the PEU crowd.  

Banga is Vice Chairman of General Atlantic, a leading global PEU.  Prior to that he served as CEO for MasterCard.  At MasterCard Banga's helped Egypt go cashless as part of his public private partnership experience.

If confirmed Banga will replace David Malpass, who ran macroeconomic research firm Encima Global prior to his appointment by President Trump.  Malpass was Trump's Presidential Campaign manager for the 2016 election.

Carlyle could have used Beschloss' expertise with affiliate ARINC which earned a World Bank ban for "procurement violations" on an Egyptian airport project.

President Biden's cabinet is chock full of PEUs.  Having another greed and leverage boy at the World Bank is par for the course and portends misery for the common person the bank is supposed to help.

Update 3-12-23:  NYPo reported:

As its financial condition declined Silicon Valley Bank reached a deal with investment firm General Atlantic to sell $500 million of common stock, but that deal was dependent on the completion of its initial share sale.

Friday, February 24, 2023

PEU Legend Thomas H. Lee Ends HIs Life

Private equity pioneer Thomas H. Lee died of a self inflicted gunshot wound yesterday morning.  He was 78.  Lee founded the PE firm that bore his name in 1974.  He formed Lee Equity Partners in 2006.

I do not know the burdens Mr. Lee faced but his firm invested in Summit Behavioral Health and Bradford Health Services.

Summit - Provider of residential and outpatient substance use disorder treatment  services and acute psychiatric care.

Bradford - A substance use disorder (“SUD”) treatment provider in the Southeast. Bradford Health is a regional leader in the Southeast with a strong market presence in Alabama, Tennessee, Mississippi, North Carolina, and Arkansas.

Lee's $2 billion will not follow him.  It remains on this earthly plane.  

May his family and friends find solace in their memories of Mr. Lee.  Life is challenging, even for a politically connected private equity underwriter.

Thursday, February 23, 2023

World Bank: Biden's Latest PEU Nomination

President Biden nominated yet another private equity underwriter (PEU) to a major position.  Reuters reported:

U.S. President Joe Biden on Thursday nominated business executive Ajay Banga to become president of the World Bank, lauding his experience forging public-private partnerships to address financial inclusion and climate change.

Banga retired from MasterCard in December 2021 and joined General Atlantic, a private equity powerhouse, on January 1, 2022.  

Also with General Atlantic is Managing Director Lord John Browne.  As BP's CEO Lord John Browne cut maintenance budget at its Texas City refinery.  That resulted in an explosion that killed fifteen in injured hundreds.

Browne joined General Atlantic before Banga.  I'm sure Lord John Browne and the General Atlantic team would be happy to consult with Banga should any World Bank projects blow up or get held for ransom.

Update 3-7-23:  Bloomberg reported:

General Atlantic is partnering with Abu Dhabi wealth fund ADQ and International Holding Co., the biggest listed company in the emirate, on a new venture that will invest in alternative assets.

A sovereign wealth fund is under consideration for "saving" Social Security.  Greed. fees and leverage are apparently the solution to all the world's ills.

Update 3-12-23:  NYPo reported:

As its financial condition declined Silicon Valley Bank reached a deal with investment firm General Atlantic to sell $500 million of common stock, but that deal was dependent on the completion of its initial share sale.

Update 4-4-23:  A private panel at this year's World Economic Forum discussed mobilizing private capital for Ukraine.

Participants included US Special Presidential Envoy for Climate John Kerry, Netherlands Prime Minister Mark Rutte, former British prime ministers Boris Johnson and Tony Blair, and Ukrainian President Volodymyr Zelensky attended via teleconference. 

 Three financiers participated, Larry Fink, chairman and CEO of BlackRock, Bill Ford, chairman and CEO of General Atlantic, and David Rubenstein, co-chairman of the Carlyle Group.

Update 12-14-23:  General Atlantic filed for a confidential IPO.

Monday, February 20, 2023

Glenn Youngkin Learned from Power and Money Hungry

Before Glenn Youngkin became Virginia's Governor he monitored rush hour traffic in Beijing as co-CEO of The Carlyle Group.  Carlyle is a politically connected private equity underwriter (PEU).


Youngkin's firm sent thousands of U.S. jobs to China during his time with Carlyle.  Yet, he turned down high paying jobs for rural Virginians in a poor region of the state because Ford Motor Company was licensing Chinese battery technology.  

Youngkin told reporters that his prior experience as the CEO of the Carlyle Group, a private equity firm, makes him "uniquely positioned to understand how the Chinese Communist Party works."

The Governor missed his chance to inform the public as to how The Carlyle Group works.   It infiltrates governments for the purpose of outsized profits.  Also, Youngkin was co-CEO, not the CEO.

Carlyle Asia Growth Group’s investment philosophy is sector-agnostic, with investments across more than ten industries, including energy, consumer, technology, business services, education, industrial, healthcare, real estate and media. Eighty percent of these investments have been made in China or India.

"In China Carlyle has demonstrated a deep understanding of local businesses and an ability to work well with Chinese companies. The Carlyle brand will also help attract senior management talent to help expand both our domestic and overseas business."

Monitoring Beijing rush hour traffic takes big data.  Youngkin wants Virginia law enforcement to have access to a woman's menstrual cycle information, frequently stored on cell phone apps.  That sounds Chinese authoritarian like.

Youngkin learned his obsession with money and power from the best, Carlyle and China.    Virginia citizens would do well to watch the power and money flows.  Glenn Youngkin's kind avoids the sunlight.

The state may want your data but hands off his. 

Update 4-27-23:   After driving away Ford EV battery jobs Youngkin is angling for Japanese chipmaking positions.

Sunday, February 19, 2023

Beware the PEU Pushers

A Goldman Sachs podcast recently featured David Rubenstein.  Business Insider reported:

The billionaire investor and Carlyle cofounder also forecast superior returns in private markets than public ones.

 "Almost every year for the last 30 years or so, private equity has outperformed public-market indexes, by anywhere from 200 to 500 basis points on average. I suspect that will continue, and it will happen in part because the economic incentives are incredible. You get 20% of the profits on somebody else's money if you do well, above a minimum return in some cases. As a result, I think people are highly motivated to do well, and they're very careful."

Careful?  This is the same David Rubenstein who called buying crypto "titillating" and interviewed FTX CEO Sam Bankman-Fried as his peer for Bloomberg in September.  

Carlyle gets to calculate their outperformace data as there are no standard measures.  Did Rubenstein include the implosion of Carlyle Capital Corporation in those figures?    Carlyle ran away from CCC's stinking carcass after it entered bankruptcy.  Rubenstein sold Carlyle Capital Corporation as a low risk, safe investment and for that he was sued.  

Another safe investment, pipeline operator SemGroup, entered bankruptcy after executives there rang up over $4 billion in energy trading losses.   After shareholders sued Carlyle pleaded "puffery" as their defense.

Defendants also contend many of the alleged statements are immaterial as a matter of law because they are "simply immeasurable or incapable of verification." [Doc. No. 211, pp. 28-29].[ 5 ] Vague statements of corporate optimism or "puffery" cannot be materially misleading because "generalized statements of optimism are not capable of objective verification and reasonable investors do not rely on them in making investment decisions."

Note Rubenstein's use of figures in his sales talk but when sued for same, Carlyle stated they aren't real measures and no one would use them as a basis for investment.  This double talk should be front and center as investment professionals push private equity for individual unaccredited investors.

CNBC interviewed the CEO Matt Brown of CAIS, an alternative investment platform for financial advisors.  CAIS provides those advisors access to hedge funds, private equity, private credit, real estate and other alternatives.  Brown recommends small investors devote 20% of their funds toward alternatives.  

He said "due diligence" is critical for small investors concerned about funds not marked to market, which is the case for private equity.   As private equity is opaque and there are no standard measures it is nearly impossible for anyone to conduct due diligence.  

"We have seen a number of proposals from private equity funds where the returns are really not calculated in a manner that I would regard as honest," Mr. Buffett said Saturday at Berkshire Hathaway's annual meeting. 
How can one devote 20% of their portfolio to an area where due diligence is nearly impossible?  That's the ask.  

Levered equity should have more risk, not less.  Small investors should be wary of the impervious blob of private equity and not get lured by the David Rubensteins and Matt Browns of the PEU world.

Update:  Grant Williams posted a warning about private equity.

Wednesday, February 15, 2023

House Committee Targets PEU Hunter

NYPo reported on Hunter Biden's role with Rosemont, a private equity underwriter (PEU):

Rosemont described themselves as “a $2.4 billion private equity firm co-owned by Hunter Biden and Chris Heinz,” with Devon Archer as “Managing Partner.”

The partners attached several branches to the Rosemont Capital trunk, including Rosemont Seneca Partners, LLC, Rosemont Seneca Technology Partners, and Rosemont Realty.

Rosemont Seneca and the Bank of China created a $1 billion investment fund called Bohai Harvest RST (BHR).

The piece was written in 2018.  PEUReport did stories on Hunter's PEU roles in 2012, 2014 and 2016.   I am all for Congress exposing political insiders' work on behalf of the PEU boys.

Fox News reported:

Julianna Smoot in 2014 became an advisory board member of Rosemont Seneca Technology Partners (RSTP), an affiliate of Rosemont Seneca Partners, the fund co-founded by Hunter Biden.

Smoot held key positions in the Obama administration. In addition to her Rosemont advisory board compensation:

Smoot went on to become co-founder of the Blue Lake Strategies public affairs consulting firm, which received more than $500,000 from Unite the Country in less than three years.
Unite the Country is a Blue Team/pro Biden PAC.  This is an example of the ways political insiders funnel huge sums to one another. 

Rosemont Seneca Technology Partners invested in reproductive testing company Counsyl in 2014.  Myriad Genetics purchased Counsyl for $375 million in 2018.  

Burnham Financial Group bought Rosemont Seneca Partners.  It's not clear how much founders Hunter Biden and Chris Heinz made from the sale.

Rosemont Realty made ABC News last year:

Rosemont Realty received a $40 million investment from the widow of a former Moscow mayor.

Rosemont located in Washington, D.C. following The Carlyle Group's lead.  Carlyle employed legions of political leaders to employ "non-lobbying" influence over tax laws, financial regulations and Uncle Sam's fat wallet.

I'd rather Congress employ a true PEU hunter to act on behalf of citizens.  Expose the lot.  The rot exists on both sides of the aisle.

It will take copious amounts of sunlight as a PEU resides under nearly every rock.

Jared Kushner — who worked on Middle East policy under former President Donald Trump — was able to secure over $2 billion in funds for his PEU Affinity Partners.

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

Update 6-30-23:  A Senate subcommittee issued a September 2020 report on Hunter Biden's gorging at the insider money trough.  That boy can flat out eat.  It's PEU level greed and it grows in the dark.

Update 8-1-23:  ZeroHedge reported Hunter's partner Devon Archer shed light on Vice President Joe Biden's influence on the Burisma board appointment.  Archer said the family's "brand" had value at a time when the firm was facing corruption allegations.

Sunday, February 12, 2023

Choosing PEUs over Elderly

NYTimes conservative columnist Ross Douthat wants government entitlements redistributed from the elderly to young people.  

Who is paying far less in taxes that could be used to support the elderly?  America's super wealthy, many of whom founded storied private equity firms.  


Workers know the harms of private equity ownership.  Bain Capital's ownership of Toys R Us resulted in bankruptcy with 33,000 jobs lost.

Politicians Red and Blue love PEU and increasingly, more are one.  One might expect the media to see the connection between political funders and government policy.  The "billionaire policy maker" has been a bug of democracy for decades.  More like a parasite.

Wednesday, February 8, 2023

SOTU PEU Faceoff: Santos vs. Romney

I'd wondered how threatened private equity underwriters (PEU) have been by the presence of fraudster George Santos in Congress. 

At last night's State of the Union Address Senator Mitt Romney (Bain Capital founder) and Rep. George Santos (Harbor City Capital) took turns calling each other an "ass."  Many consider "ass" a synonym for private equity.

The public becomes aware of dysfunction when the system pushes too far.  George Santos personifies that dysfunction.  He went from being late on rent to a salary of $750,000.  That money came from a sponsor(s).

Romney's early sponsors at Bain Capital came from Panama shell corporations.  Those investors made huge returns on the backs of portfolio company workers.

Mother Jones reported the experience of one worker at a Bain Capital owned furniture company:

We’ll walk into a room and there’ll be a big poster that says like, “We only had five reviews yesterday. Obviously, you people don’t care enough. You don’t try.” It’s all in angry red markers. They’ll say, “I don’t know when you guys stopped caring.” They’re insane. They’re screaming in your face. They have no problem saying these things on the floor in front of customers. It’s coming from above and trickling down.

I think they’re a sinking ship. If you’ve been there long enough, you know what it was like before. Now there aren’t any fresh-baked cookies. There aren’t any ponds left in the stores. Bain is going to suck every penny out of it and then discard it once they’ve completely ruined it. All of us salespeople, that’s how we feel. Once the last penny is out of the jar, they’ll sell it.

Enough voters have worked for a company acquired by private equity and are familiar with management cutting core service elements, crapifying the workplace and yelling at employees for not meeting greed inspired targets.

I believe the public is able to internalize the incredible offensiveness of George Santos' fraud.   It's tangible, seen in everything the man does.  Romney's PEU greed is more aloof, alien and flourishes out of the sunlight.  Is this in part why the senior Senator evaluated the new Congressman's seat selection?

Santos is too out front, too self promotional, and rose too quickly without paying his PEU dues.  He may be the prism through which the public can see:

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

And they will know who they serve.

Update 2-11-23:  The man who lied that he met the job requirements to land a position blames the employer for his illicit act.  Daily News reported:

Rep. George Santos says he only said he went to college because Long Island Republicans would never have endorsed his candidacy if they knew he had just a high school diploma.

“I would have never gotten the nomination from Nassau County GOP if I had not concluded college,” he told Newsmax. “To say that I deceived, and (ran) a campaign of deception is just not fair. That’s just a political spin.”

No, George Santos.  You ran a campaign of deception and are now deflecting it with political spin.  Deception is the PEU way and its exposure should concern many in Congress.

Biden's Crypto Regulation to Benefit Rubenstein

President Joe Biden and lawmakers are expressing increased interest in regulating cryptocurrencies.   Prior to FTX's bankruptcy Carlyle Group co-founder David Rubenstein expressed his wishes on crypto regulation

Billionaire David Rubenstein says he's personally invested in companies doing work in the cryptocurrency sector and is optimistic that government regulation won't hit the brakes on the industry. 

"The crypto constituency is very strong in congress [and] they tend to be very Republican [or] very libertarian," he said. "The industry is not likely to be soft when dealing with members of Congress."

Rubenstein also praised FTX founder Sam Bankman-Fried for stepping in to aid the crypto sector and taking steps to inject liquidity into faltering businesses. 

Rubenstein interviewed SBF on his Bloomberg TV show.  During the interview neither man disclosed their investment in Paxos, a crypto infrastructure company.  

Surely Paxos has experienced financial stress from repeated crypto implosions and loss of investor interest in the risky sector.

Rubenstein updated his regulatory predictions for crypto after SBF's great fall  The private equity underwriter (PEU) offered:

Note how likely financial fraud is characterized as "mistakes." 

A divided Congress and President Biden will have to come together to regulate crypto in time to meet Rubenstein's prediction timeline.  

President Biden has been a frequent Thanksgiving guest at Rubenstein's Nantucket compound where homes rent for as much as $75,000 per week.  

Washington continues to work for policy making billionaires like Mr. Rubenstein.  Politicians Red and Blue love PEU and increasingly, more are one.

Update 2-13-23:  CNBC reported:

“Effective February 21, Paxos will cease issuance of new BUSD tokens as directed by and working in close coordination with the New York Department of Financial Services,” Paxos said in a statement, adding that it would “end its relationship with Binance for the branded stablecoin BUSD.”

What happens to Paxos issued BUSD tokens already issued?   

BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024,” Paxos said in a statement.

Bloomberg added:

PayPal was going to do a white-label Paxos stablecoin dollar — in the manner of BUSD — but “is pausing work” now that NYDFS is sniffing around Paxos. “If and when we seek to move forward, we will, of course, work closely with relevant regulators.” Like Paxos, PayPal has a New York BitLicense.

WSJ noted:

The SEC has sent Paxos a Wells Notice alleging BUSD is a security.

Update 2-15-23:  Famed investor Charlie Munger said of cryptocurrencies:

"It isn't even slightly stupid, it's massively stupid, and of course it's very dangerous, and of course the governments were totally wrong to permit it."

Tuesday, February 7, 2023

PEU Funded Portfolio in Nantucket

Private equity underwriter (PEU) David Malm is a real estate tycoon on Nantucket Island and Martha's Vineyard.  The Real Deal reported:

Malm, a managing partner of the Waltham-based Webster Equity Partners, a private equity firm that invests in the health-care industry

Malm started with Bain Capital in 1987.  He spent fifteen years with Halpern Denny & Company and joined Webster in 2007.

Halpern Denny & Company was a private equity firm that invested in the healthcare sector. The firm was founded in 1991 and was based in Boston, Massachusetts.

Webster Equity Partners is a top healthcare investor according to Becker's. 

The greed and leverage boys made fortunes from flipping healthcare companies and David Malm took those profits and put them into island real estate.   Webster's healthcare portfolio includes:

Healthcare costs did not go down from 1991 to today.  Despite numerous challenges PEUs kept their preferred "carried interest" taxation.

Carlyle Group co-founder David Rubenstein owns a Nantucket estate.  President Joe Biden spent a number of Thanksgivings at Rubenstein's Nantucket compound.  Biden doesn't need to declare the value of this donation.  Malm's rent range of $25,000 to $75,000 a week provides some context to the public regarding the value of Rubenstein's nearly annual generosity to the Biden family.

Politicians Red and Blue love PEU and increasingly, more are one.  There once was a PEU from Nantucket....

Update 2-8-23:  The Carlyle Group may pay up to $15 billion for healthcare firm Cotiviti which sold for $5 billion in 2018 to Veritas Capital.  

Update 2-10-23:  Private equity in UK healthcare:

The healthcare sector has been financialised. Care homes, often seen as prime development sites, have been taken-over by private equity and are run for profit rather than care for patients. Profits are generated through financial engineering, tax avoidance, low wages and a high level of deliberately unfilled vacancies. This delivers record profits, dividends and executive pay, but poor care for residents.

Monday, February 6, 2023

The Insider Money Funnel

A series of stories shined light on the money funnel powerful people enjoy while regular folks struggle.  It encompasses both political teams.

Politicians Red and Blue love PEU (private equity underwriters) and increasingly, more are one.  The big money wash ensures government funds flow to PEU affiliates, that legislation helps and is often written by the PEU class and that the greed and leverage boys get to keep their preferred "carried interest" taxation.

Our political teams love pointing out the twig in the other's eye whilst ignoring the log in their own.  The buyers and sellers of influence do not want the giant money funnel impeded.  That spells abandonment to the average citizen.

Update 2-9-23:  Fox News reported:

Democratic Rep. Ilhan Omar's campaign cash to consultants fell by millions of dollars after she removed her husband's firm from her payroll.

Update 2-16-23:   The multiple major income stream insider phenomena applies to Jenna Bush Hager.  What will win, company policy or political connections?  

Update 2-26-23:  Fox News reported:

Walker's campaign arm Team Herschel wired 11 payments worth $595,606 to Jetts, according to Federal Election Commission records. Other Walker-linked committees added nearly $270,000 in payments to the company during the midterm elections.

The funds were used to pay for air charter services on one of Jeffrey Epstein's former private jets.   You can't make up crazier stuff.

Update 2-27-23:  Reuters reported:

FTX founder Sam Bankman-Fried conspired with two former FTX executives to donate tens of millions of dollars in order to influence lawmakers to pass legislation favorable to the company.

Those donations were unlawful because they were made with "straw" donors or corporate funds, enabling Bankman-Fried - one of the largest donors to Democrats in the 2022 midterm elections - to evade contribution limits.

Update 5-30-23:  HuffPo ran a story on "The Golden Age of White Collar Crime".

An entrenched, unfettered class of superpredators is wreaking havoc on American society. And in the process, they've broken the only systems capable of stopping them.
Update 10-30-23:  The husband of Blue Team Congresswoman Cori Bush has been paid $102,500 by his wife's campaign since January 2022. 

Sunday, February 5, 2023

Carlyle Hires Next CEO


Carlyle Group Inc. plans to name investment-banking veteran Harvey Schwartz its new chief executive, according to people familiar with the matter.

Schwartz was co-CEO of Goldman Sachs Group.   He is currently a board member at SoFi.  His bio in their latest DEF14A states:

Mr. Schwartz has served as a member of our Board of Directors since May 2021. Mr. Schwartz is a business leader, investor and philanthropist, and, as both an investor and advisor, he is currently involved in a range of investment and philanthropic endeavors focused on modernizing and strengthening the financial system, the physical and mental health management of individuals and the development of future business leaders, including women and young people seeking a career in finance.
Mr. Schwartz has served as the group chairperson and non-executive director of The Bank of London, a clearing and transaction bank with operations in London and New York City, since November 2021. In addition, Mr. Schwartz serves on the board of One Mind, a mental health and brain research nonprofit organization.
In April 2018, Mr. Schwartz retired from Goldman Sachs Group, Inc. (“Goldman Sachs”) following 20+ years at the company where he oversaw sales and trading, finance, technology and operations, and held numerous senior leadership positions, including Chief Financial Officer, Global Co-Head of the Securities Division, Head of Securities Division Sales, Head of North American Sales and Co-Head of the Americas Financing Group. He completed his tenure as Goldman Sachs’ President and Co-Chief Operation Officer. Mr. Schwartz also served as a member of Goldman Sachs’ Management Committee and co-headed its Risk Committee, Steering Committee on Regulatory Reform and Finance Committee, and he established and served on Goldman Sachs’ Investment Policy Committee. Prior to Goldman Sachs, Mr. Schwartz spent a decade working at several other financial firms, including Citicorp from 1990 through 1997.

How long will Harvey Schwartz last in the Carlyle executive carousel? 

Update 2-9-23:  FT ran a piece on Schwartz calling him a "street fighter."  Funny, former Carlyle co-CEO and now Virginia Governor Glenn Youngkin owns a stake in a Professional Fighters League.

Thursday, February 2, 2023

SEC Commissioner Notes Elephant in Henhouse

A friend sent me the following Twitter link

SEC Commissioner Caroline Crenshaw, using FTX as an example of why private offerings do not offer investors sufficient protections.

The post referenced the Commissioner's speech on the SEC website.  Crenshaw cited Theranos and WeWork in addition to FTX.  

It took no time to find a 2019 presentation on the SEC's website encouraging private investment.   

 My friend responded with:

It's amazing that guys that promote free markets want private m a r k - i t s.  I take issue with the reported results. They have merged deal-making with the asset manager and debt manager. They control the inputs on all.  They have been allowed to bypass accounting standards, audit standards, anti -Trust regulations, and market clearing. They have been aided and abetted by the Federal Reserve which allowed them to use zero interest rate policy to over-leverage the very same assets they've taken out of circulation. The fact that Jay Clayton didn't mention this while at the SEC shows you how deep into the pockets of his Masters he is. 

The Rake on these private assets is unreal. Think about Uber.. How many billions were taken out by early seed investors on a platform that has never made any money but the valuation in the private Market was insane and then they came public. The promotion and disinformation they are allowed to get away with just tells you that they're going to get what they want, what they've been planning for.  It works for them.  It works for the people that they've captured but I don't think it's going to work for any of us.. And now a word from our sponsors the FOMC they want to induce pain on labor.. Sigh 

I offer a long and loud round of applause!

So that's how those returns get "excess" and/or "uncorrelated" (sales pitch). 

Remember the greed and leverage boys want your individual retirement account/401k money.  FTX's Sam Bankman-Fried testified before Congress to his company's risk management regimen (which did not exist in reality).

Carlyle Group co-founder David Rubenstein sold a highly leverage mortgage backed security fund as "low risk" before Carlyle Capital Corporation imploded in early 2008.  They then ran from its carcass. 

The private equity elephant wants in your retirement henhouse and the SEC may accommodate such a move .  Will you let him in? 

Update 2-4-23:  Wealthion's Adam Taggert aired his interview with Jim Rickards.  Rickards predicts a significant drop in stock market indices.  He recommends investors put money into private equity.

Taggert mentioned new models coming that give investors access to private equity.  He asked viewers to indicate their interest in learning more about those opportunities.

I thought Wealthion was leveling the field for the little guy, not serving us up to the greed and leverage boys looking for their next mark.