Wednesday, May 31, 2023

FT on China Love for PEUs


An IVC Evidensia veterinary practice in Sweden may not appear to have much in common with a Vena Energy solar project in Taiwan, or GardaWorld security personnel at a Canadian ice-hockey game. 

But some of the capital that helps sustain all three companies comes from the same place: the People’s Republic of China. 

Private equity firms EQT, Global Infrastructure Partners and BC Partners — the immediate owners, respectively, of the three businesses — are just three among dozens of western buyout groups that Chinese state-backed investors such as the State Administration of Foreign Assets and China Investment Corporation have poured money into.

Private equity underwriters (PEU) sent countless U.S. manufacturing jobs to China over the last few decades.  Virginia Governor Glenn Youngkin did just that with The Carlyle Group (United Components and Nature's Bounty) and as recently as 2020 was monitoring rush hour traffic in Beijing.  Youngkin went from corrupting politicians to being a corrupted one, possibly one with presidential ambitions.

Rabobank's Michael Every said "The kind of mess you've got in America between Blue and Red, no country wants that (kind of polarization)."  

Every added China "never wants to repeat what happened to the U.S.  They are fully cognizant how the U.S. was de-industrialized, hollowed out.  They were the primary beneficiary of that."  Youngkin and The Carlyle Group had a role in hollowing out local U.S. economies.  

A major business reporter wrote in 2011:

I have seen so many people -- particularly those in their 50s - 70s -- taken apart by what has happened in their industry as greed has hollowed out the economy. These are people took pride in their jobs and held themselves to this invisible standard that we all just took for granted, but is being wiped out.

The Carlyle Group scares me more than anything I've ever seen on Wall Street. It seems to exist to corrupt politicians and it's hard to know who they even represent.

That same year a Carlyle's Francis Finelli warned about the dangers from our biggest enemy, China.  

Politicians Red and Blue love PEU and increasingly more one.  How will the greed and leverage boys benefit from the Debt Ceiling deal?   It will be found in the white space between the words.

Update 6-1-23:  Blackstone co-founder Stephen Schwarzman showed his China love with a scholarship program at Tshinghua University in Beijing.  Is that near where Glenn Youngkin monitored rush hour traffic at Carlyle?