Sunday, March 19, 2023

Fortune Forgot About BankUnited

Fortune reported private equity underwriters (PEU) are circling the carcass of Silicon Valley Bank and Signature.

Should the FDIC fail (again) to find a white knight to buy the whole bank, it will be forced to sell it off piecemeal, and that's where private equity comes in, a group of investors the FDIC does not look upon favorably. Several alternative asset managers including Blackstone, Ares and Carlyle Group are interested in the $74 billion loan book and are evaluating whether or not to bid, several sources familiar with the sale process said.

The FDIC had no problem subsidizing Carlyle, Blackstone, Centerbridge and WL Ross to the tune of nearly $6 billion on BankUnited.   

U.S Presidents of both political parties host PEU founders regularly at the White House.  Those same founders are known as "policy making billionaires" in D.C. circles due to their outsized influence on government actions.

The FDIC saved SVB which catered to private equity CFOs and venture capitalists.  It did not have to guarantee uninsured deposits from wealthy risk takers, but it did.

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