Biden PEU Diligence 2008

Politicians Red and Blue love PEU (private equity underwriters) and increasingly, more are one.  The greed and leverage boys cut their teeth aligning their investment fortunes with political stars.  Such was the case with Paradigm Global Advisors and two Biden family members, Hunter and James.  

An SEC filing showed:

...PGA reorganization was modified effective August 11, 2006, so that PGA is now controlled by R. Hunter Biden, its Chief Executive Officer, and James B. Biden through an entity currently wholly-owned by them. 

A different SEC filing showed Paradigm partnered with Allen Stanford to form Paradigm Stanford Capital Management.  From that entity they offered their Core Alternative Fund in the ash heap of the 2008 financial crisis.  

A November 2008 filing indicates the fund to be both a hedge fund and a private equity underwriter (PEU).

 

The Justice Department charged Allen Stanford with fraud in February 2009.  The press was assured there was no connection between any Biden and the fraudster.  Except there is....

It's all PEU diligence.  

(The Red Team's sudden titillation would feel more sincere if they'd also exposed insider deals on their side.  PEU Report has been on this case for over a decade.)

PEU Rubenstein on Homeless Problem

Carlyle Group co-founder David Rubenstein stated in a recent CNBC Squawk Box interview with Joe Kernen:

"We haven't solved the (homeless) problem." 

Private equity underwriters (PEU) have done their part to make housing less affordable.  

As San Diego becomes increasingly unaffordable, throwing more families into homelessness, Blackstone’s aggressiveness as the third largest landlord in the area in hiking up rents for its thousands of units only adds to the problem. 

Carlyle made significant investments in New York multi-family real estate.  The Real Deal indicated Carlyle is buying "market rate" properties and is free to raise rents and alter operations.

The Lever reported how private equity is changing the apartment application process.

Landlords are increasingly turning to private equity-backed artificial intelligence (AI) screening programs to help them select tenants.... 

The prevalence of incorrect, outdated, or misleading information in such reports is increasing costs and barriers to housing, according to a recent report from federal consumer regulators.

The PEU boys will continue contributing to the number of homeless.   

Mr. Rubenstein has been known to provide his Nantucket compound over Thanksgiving for Vice President/President Biden.  He has a multi-year track record of doing that.

Rubenstein (as part of his "we") hasn't solved the homeless problem.  I didn't realize he was trying.

Update:  At least one multi-family investor is in financial trouble.

Macron: PEUs Solution for Global Poverty

French President Emmanuel Macron told Fareed Zakaria that private equity underwriters (PEU) are part of the solution to global poverty, climate change and biodiversity.  The French leader hosted a Summit for a New Global Financing Pact. 

I had a feeling Macron would mention the PEU boys once he stressed the World Bank and IMF use leverage and access private money.

The rise of private equity in the U.S. corresponded with the relative decline in wealth for the vast majority of citizens.

So the group that contributed to inequality is touted as a critical part of the solution?  Promoting the greed and leverage boys is a strategic priority for U.S politicians and our close allies.  Macron punctuated that fact.

Update:  Macron's former employer Rothschild has a PEU division, Corporate Private Equity.  Their website states:

Our Corporate Private Equity business focuses on investing in lower-middle market companies in Western Europe through Five Arrows Principal Investments (FAPI) and in the US through Five Arrows Capital Partners (FACP).

PEUs On Both Sides of Buyouts

Advent International and Warburg Pincus will buy Baxter's BioPharma Solutions business for $4.25 billion.  The two private equity underwriters (PEU) will close the deal in the second half of 2023.

At least four PEUs will provide funding for the deal.  They include Ares Management, Blackstone, Blue Owl Capital and HPS Investment Partners.

Bloomberg reported how PEUs have become the "Kings of Debt, Suppliers of Private Credit."  The Carlyle Group's new CEO cited private credit as a critical growth area for the firm.

Carlyle employed private credit in the past to conduct backdoor takeovers, via "loan to own" strategies. It took over Brintons' and Mrs. Fields using that method.

Retirement funds don't have to look far to identify the risk of PEUs being on both sides of a deal.

KKR is handing over mattress maker Hilding Anders International to creditors as it did with Telepizza in early May.  Telepizza bondholders – Oak Hill, Blantyre, HIG, Fortress and Treo funds-- became equity owners after KKR, Artá, Torreal, J Safra Group and Altamar surrendered the company to creditors.

Retirement funds may wish to consider whether the greed and leverage boys are planning to fund each other's junk.  

A friend recently wrote on the PEU move to supply credit:

During the 2008 crisis private equity almost met it's death knell but were rescued by the Fed... After the next 15 years the banking sector, especially the regionals, have been dying on a vine, some say to targeted regulations that pushed them into a precarious situation by default... Who comes in to replace that piping in the system.  It's our saviors, the private equity capital guys... So they have the funds to lend and they are also the holders of those credit instruments, i.e. blink-blink they make the rules, the accounting, the marks, the leverage, who defaults, who doesn't... Hmm, kind of reminds me of the rules of the ISDA.  They get to determine when a default is a default.  It's a circuitous reward system, like its own ecosystem.. 

CalPERS wants to put more money into private equity to supercharge returns.  They should know given their prior equity stake in Carlyle.

With PEUs on both sides of buyouts, it's a loan to own era.

Update 6-23-23:  Regarding "the accounting" the SEC and the Public Company Accounting Oversight Board fined Marcum LLP a combined $13 million for piss poor audits of SPACs.

The SEC found the deficiencies were not limited to Marcum's SPAC clients.

Someone has to look the other way at multiple junctures for things to occur as they have.   

Update 8-23-23:  It took 15 to 20 lenders to refinance Vista Equity's Finastra Group.

Friendly Advice Re: PEUs

A friend kindly sends articles and video complete with his commentary.  I asked if it was OK to share some and he gave permission.  Here goes:

...remember money flows where it's treated best, not where it acts best.  Thank God we're exceptional... poof...remake

I was just listening to Senator Cruz on CNBC talking about the debt ceiling. One of his comments mentioned something about privatization. I'm starting to wonder if this whole situation was contrived to create a catalyst for such a move ............... something to watch. 

I think default is too hard now......the Fed enabled the worst actors.......now emboldened.......and protected.....unless externality.........perhaps a war?   hmmm........but then again inequality has worked so well.

There is an unholy alliance between the government and Silicon Valley........but you know that......and it will get worse.

There are so many overlaps of the same types of behavior I cannot leave it to happenstance.

Sodom and Gomorrah had nothing on us... The Feds have fostered and condoned bad financial actors through all their management tools for the inflated Ponzi collateral of the undeservingly rich and infamous financial community... By allowing them to fail they would have changed behavior but instead they allowed them to weave themselves into our system as to become one... whatever laws regulations and conflicts held in the past have been corroded, diluted,and tossed in the garbage.

The other thing I've been wondering about is the term national security interest ... It's been popping up a lot lately and I'm starting to believe private equity is going to fall into that category . We all know that they were saved in 2008 and now they are even stronger but no one's going to admit they were part of a policy agenda. I think they're working their way right into that ... We'll see every rule and every line I ever thought existed has been crossed and there are no penalties.  So as they said in Caddyshack "WE'VE got that going for us." 

Schwartzman and company are worms . So we are to believe that China snookered the PE brain trusts or maybe the PE guys are the betrayers on all of us . They don't care where they get their fees from only that they control it all . All this capital should have been vetted 30 years ago. The narratives we swing to avoid accountability would make Faust blush.

...all the debt, all the market cap, all the offshore tax havens, all this wealth (which is fine).... I'm not against wealth but this is how it randomly gets distributed in a normal curve universe?

He's helped me see that government inaction is a form of preferential action.  I knew private equity underwriters had co-opted government but never thought of them as a preferred strategic industry, one the levers of government actively support on an international stage.

To think that during a budget crunch the PEU boys could be our saviors?  That's truly rich.

Update 6-25-23:   French President Emmanuel Macron offered private equity as part of the solution for global poverty, climate change and biodiversity.  He did so in an interview with Fareed Zakaria on CNN. 

Carlyle CFO Buser to Retire

The Carlyle Group is losing yet another top executive.  Chief Financial Officer Curtis Buser is retiring and will be replaced by John Redett, Chief of Carlyle's Global Financial Services Division.  Redett will become CFO and Chief of Corporate Strategy on October 1st.

Buser is 59 while Redett is 55.  The move takes place as Carlyle wants to lend more to finance deals.  CEO Harvey Schwartz cited financing Carlyle's private equity buyouts as a way to reduce fees and add to profitability.  

With banks less interested in funding buyouts the greed and leverage boys see opportunity.  It's also a way to reduce the numbers and size of sphincter moments as affiliate debt comes due and needs refinancing.  

Ironically Carlyle's co-founders got cross-ways with former CEO Kewsong Lee who pushed Carlyle to offer more corporate financing.  Lee left suddenly last fall.  Peter Clare left after not getting the top job.  Buser is the latest 2022 top executive to leave the firm.   

UVA Board of Visitor Candidate's Rich History

Virginia Governor Glenn Youngkin dropped his ESG evangelism once sworn into office.  As Carlyle Group co-CEO Youngkin displayed a long, vocal record of supporting environmental, social and governance (ESG) efforts.  He called it good business.  

The governor has a real opportunity to impact governance at the University of Virginia.  The Daily Progress reported:

Gov. Glenn Youngkin is close to appointing four new members to the University of Virginia’s Board of Visitors, according to sources close to the governor. And Joel Gardner, a vocal critic of UVa — especially its diversity initiatives — is slated to be one of those appointees to the body that governs the school, those close to the decision-making process told The Daily Progress.

Joel Gardner is senior managing director at Burnham Securities.  The Burnham comes from Drexel Burnham Lambert.  CNBC noted in 2015:

Drexel Burnham Lambert collapsed in scandal 25 years ago, but alumni of the once-powerful investment bank are now in some of Wall Street’s most powerful posts. The firm famous for high-yield or “junk” bonds filed for bankruptcy on Feb. 13, 1990 after several years of legal troubles. Thousands were out of work the next day, which was dubbed the “Valentine’s Day Massacre.” Drexel’s bond department head Michael Milken would pay huge fines and serve nearly two years in prison for securities fraud.

Drexel alum went on to fame and fortune at storied private equity underwriters (PEU), Apollo, Blackstone, Cerberus, Ares and Moelis.  Michael Milken spent a fraction of his sentence in jail and he kept the vast majority of his ill gotten gains.  Milken's image rehab tour climaxed with an expungement of his felony criminal record by President Donald Trump.

Back to Governor Youngkin and Joel Gardner, his likely UVA Board of Visitors appointment.  

He is now a senior managing director at investment firm Burnham Securities.

FINRA's BrokerCheck report on Burnham Securities indicates the firm ceased to operate as a broker in May 2016.  It also shows six regulatory events where Burnham paid fines for SEC violations.

The Texas Comptroller Taxable Entity Search showed two Burnham Securities entities, both ceased paying franchise taxes.

Gardner should appreciate this history given his undergraduate major (History 1970).  His 4th year was the first year 450 undergraduate women were admitted.   

His law degree places him in a unique position to understand the many ways private equity underwriters frame legislation and state budgets to their advantage.  

Governor Youngkin could appoint a young visionary Red Team leader to UVA's Board of Regents.  Maybe a libertarian minded doctor who wants to prevent disease instead of enrich healthcare corporations, many of which are PEU owned.  

That said, university board slots are ways to payback donors and benefactors.  Most of Youngkin's PEU kind are white guys who got out of college before cell phones were invented.  I should know because I am one.  This UVA graduate wants the Board of Visitors to be a true mix of society, not a bunch of people with PEU founder/managing director titles.

Also, if the guy in his mid 70's is retired and his firm no longer operates, just say so.   Governor Youngkin has a history problem, his record at Carlyle.  He wants to change it, just like his new Board of Visitor appointees.  Make UVA white and male again.

Update:  Bloomberg interviewed Gov. Youngkin at the International Paris Air Show.

RFK Jr. Seeks PEU Alpha

Greed is good, even amongst Blue Team progressive legends.  Robert F. Kennedy, Jr. was named a Venture Partner with VantagePoint Venture Partners in February 2009.  He served as a  Senior Advisor for Highmore Group from 2017 to 2020.   Highmore has at least one private equity fund according to an SEC filing.  A 2021 press release stated:

Highmore offers a unique breadth and depth of expertise across the whole of the alternative investment universe, in both liquid and illiquid investments: from private credit to real estate, private equity to hedge funds, and liquid alternatives to cash management. 

The 2023 RFK Compass Summer Investors Conference just concluded.  It ran from June 13-16.  

Our flagship Summer Investors Conference at The Kennedy Compound and the Chatham Bars Inn has concluded! This invitation-only event convened key investment decision makers—leading institutional investors and fund managers—for three days of unparalleled thought leadership and disruptive programming around seeking alpha while doing good.

Lots of private equity underwriters attended.

Politicians Red and Blue love PEU, even progressive candidates for the White House.

PEUs Fund Nikki Haley

Red Team White House hopeful Nikki Haley attended a fundraising event for her campaign hosted by Wall Street executives in New York according to CNBC. 

The hosts for the fundraiser include Joseph Konzelmann, a partner at private equity giant TPG; Gautam Chawla, a vice chair at financial behemoth Barclays; and Evan Baehr, who runs a venture capital firm headquartered in Austin, Texas, according to the invitation.

Two of the three hosts are private equity underwriters (PEU).  TPG just announced a deal to buy Angelo Gordon, the former employers of Mrs. Chris Christie.  Her husband is another potential White House candidate for the Red Team.

Learn Capital Managing Partner Evan Baehr contributed to the campaign of J.D. Vance, a fellow PEU.  Both have ties to Peter Thiel.  Baehr's bio states:

"he cofounded Able, a financial technology company backed by Mike Maples and Peter Thiel, which sold in 2017"

After rumors of its demise Able sold "various assets" to Fundation (Feb. 2018) which combined with ODX to form Linear Financial Technologies (Feb. 2021).  Amount acquired Linear Financial Technologies (Feb. 2022).  Amount is an affiliate of WestCap Group, another PEU.

Baehr's bio could lead one to believe he rubbed elbows with Bill Clinton and Tony Blair.

He’s Founder of Teneo, a national leadership organization

Not so.  Baehr helped found Teneo Network, not Teneo Capital.  Baehr's pay from nonprofit Teneo Network amounted to $520,000 on 2021.  Over a three year period it totaled over $1.1 million.

The nonprofit is set up to "crush liberal dominance."  Oddly that's difficult to discern when viewing the nonprofit's one page website.  It does have opportunities for amplification and partnership.  In other words it is part of the Red Team money funnel.

It's interesting Baehr chose to steal the name of a Blue Team money funnel in setting up his influence purchasing operation.

Politicians Red and Blue love PEU and increasingly, more are one.  Consider it wealth democratized, except they hate paying their fair share of taxes.

Update 7-17-24:  Evan Baehr interviewed J.D. Vance in 2021.  Vance is the VP candidate on the Red Team.  Vance stated in the interview that Alex Jones is right.

Suarez Latest White House PEU Candidate

It's official.  Another private equity underwriter (PEU) officially threw their name in the hat for the White House (Red political team).  Miami Mayor Francis Suarez declared his candidacy earlier this week.  

Suarez is a Senior Operating Partner for DaGrosa Capital Partners.  CNN failed to note his PEU role in their story on his announcement.

Should former Carlyle co-CEO and Virginia Governor Glenn Youngkin enter the race we could have the battle of the NDA's (non-disclosure agreements).  Questions could be asked and completely non-answered, a linguistic characteristic of most PEUs.

PEU Francis Suarez is in the race.  How DaGrosa!

Update:  Three news stories in the last week mentioned Suarez' role with DaGrosa.  Bloomberg ran two and the Miami Herald had one.  The Herald called Suarez a private equity executive.

Update 6-17-23:  A Suarez aide wrote a fawning piece about billionaire Ken Griffin.  Insiders serve insiders.

Update 8-16-23:  My wise friend wrote me:

In an interview with NBC News in early July, Suarez said, “I’ve done well, and I’m not going to apologize for doing well.”

“I’ve never used my position inappropriately to have any sort of financial gain.”

He commented:

Suarez exposes himself in those two lines. Number One FU I'm not going to apologize. Number two, I'd say he used it to his maximum benefit IE  like all politicians he used it appropriately for the financial gain meanwhile the cost of living is going up everywhere and placing people in increasingly desperate positions.

The PEU boys earned every bit of their outsized pay.  The common man, not so much.

Update 8-31-23:  Suarez suspended his campaign but his financial filings are revealing.

TPG to Buy Angelo Gordon, Chris Christie PEU Connections

TPG will buy Angelo Gordon for $2.7 billion.  Red Team Presidential candidate Chris Christie's wife worked as a Managing Director for Angelo Gordon until 2015 and continued to receive significant deferred compensation after quitting.

Christie benefited from his insider political status via an $800,000 consulting contract with a pharmaceutical firm.  The deal ended when Christie was appointed to the company's board of directors.

Chris Christie formed an investment fund but it had a hard time getting traction in the investment community.  Hampshire Christie Qualified Opportunity Fund is a Morristown, NJ real estate fund.  A recent SEC filing indicated the fund raised $55 million of a target $250 million.  A co-invest fund of the same name raised $3 million.

Christie's board bio for Pacira BioSciences shows his consulting firm.

Christie 55 Solutions, LLC, a consulting firm that assists corporate, government, and association clients with their business strategies and complex public policy and regulatory challenges at the state, federal, and international levels

​

•

Managing Member (March 2018 to present)

Angelo Gordon has a private equity portfolio.  It refinanced Benihana in 2018.  That story stated:

Angelo Gordon’s Private Equity Group focuses on acquiring businesses and assets with strong management that have the potential for meaningful growth and value creation. The Private Equity Group focuses on two core industry verticals: Retail/Consumer and Financial Services. Since inception, Angelo Gordon’s private equity investment team has sourced and led numerous transactions in these core industries.

Private equity underwriter (PEU) TPG Capital will swallow fellow PEU Angelo Gordon.

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

CalPERS Musicco Knows PEU

Almost Daily Grant's reported:

The California Public Employees’ Retirement System (Calpers) detailed plans to ramp up its venture capital portfolio allocation Friday, as the pension behemoth looks to atone for a “lost decade” of under-investment in private assets, a decision which cost the fund as much as $18 billion in foregone returns over the ten years through 2018 per newly installed chief investment officer Nicole Musicco.  Calpers intends to pour as much as $5 billion into the asset class, more than five times its current foothold and a sum sufficient to become one of the largest venture investors in the U.S.

Prior to joining CalPERS CIO Musicco served as partner with RedBird Capital Partners, "an investment firm focused on building high growth companies, in partnership with entrepreneurs and families."

Musicco headed up private equity investments for an Ontario pension fund prior to joining RedBird. 

CalPERS knows private equity from its limited partner stake in The Carlyle Group, a politically connected private equity underwriter (PEU).  Flashback to May 2001:

With a newfound aggressiveness, CalPERS is investing in hedge funds, buying stakes in private equity firms and loading up on junk bonds.

Two months ago CalPERS, which has in the past five years more than doubled its commitment to private equity, picked up ownership stakes in two private equity firms - a first for any public fund. CalPERS paid $175 million for a 5 percent interest in the Carlyle Group, the high-profile fund whose partners and consultants include former president George Bush and former Defense secretary Frank Carlucci, and it paid $60 million for a stake in a venture capital subsidiary of Texas Pacific Group. CalPERS now ranks as the nation's single largest private equity investor, having eclipsed the Washington and Oregon state plans, which had dominated the field.

CalPERS knew PEUs from the inside.  That may or may not explain avoiding big PEU bets after the 2008 financial crisis.  

Their new CIO knows PEUs too and she's ready to load up in the riskier side of the business.  Will that include RedBird's new joint venture with former CNN CEO Jeff Zucker?  Time may tell.

Update 9-15-23:  Musicco will step down as CalPERS CIO at the end of September.  She lasted 18  months in the role. Stay tuned for Musicco's next PEU role.

Real Deep State is PEU Boys

The insider money funnel is bipartisan.  Many consider policy making billionaires to be the deep state as they craft tax policy and steer spending from Uncle Sam's wallet.  

Two stories regarding the Red political team are reflective of these statements.  An RNC leader in California receives a $120,000 salary for working two hours per week.  

Red Team Presidential candidate Ron DeSantis is headed to New York for a fundraiser sponsored by private equity and hedge fund executives.  CNBC reported:

The hosts listed on the DeSantis invitation include Paul Ardire, a partner at GoldenTree Asset Management, along with Christian Michalik, Rob Michalik and Corwynne Carruthers, who are all leaders at Kinderhook Industries, a private equity firm with at least $5 billion in assets under management, according to data from PitchBook. GoldenTree has at least $50 billion in assets under management, PitchBook says.

Politicians Red and Blue love PEU and increasingly, more are one.  The greed and leverage boys are the real deep state given their power and influence.  Trump's ramblings are for show and manipulation.

Update 6-14-23:  While the insider money funnel keeps circulating huge amounts of cash Donald Trump rails against the arms of government that would prevent or contain his White House return revenge fest.

Update 6-15-23:  Trump panders to the PEU Deep State while railing against his political opponents.  

Update 6-18-23:  Flashback to 2020 when General H.R. McMasters said:

In recent years, investment from U.S. venture capital and private equity firms in Chinese artificial intelligence companies exceeded U.S. investment in U.S. artificial intelligence companies.

Consider this interview with author Gretchen Morgenson.

She discusses how the four largest private equity firms — Apollo Global Management (APO), The Blackstone Group (BX), The Carlyle Group (CG), and KKR & Co. (KKR) — have grown to have an outsized impact on not just the U.S. economy, but American society as a whole.

Another Rubenstein Villain Interview

Carlyle Group co-founder David Rubenstein interviewed the head of Saudi Arabia's sovereign wealth fund in March 2020.  Public Investment Fund CEO Yasir Al-Rumayyan said he was instructed by the Crown Prince to head up the PIF and gave him a start date.  Prior to that Al-Rumayyan was CEO of Saudi Arabia's largest investment bank, Fransi Capital.

Rubenstein was effusive in his praise for changes the kingdom planned to implement.  CNBC asked about the Crown Prince's shakedown of family members at the Ritz Carlton in Riyadh.  Rubenstein said he "didn't know much about that."

Washington Post journalist Jamal Khashoggi was brutally murdered in the Saudi consulate in Ankara, Turkey in October 2018.  

Freedom Forward asked The Carlyle Group not to participate in the Saudi Future Investment Initiative (FII).  Al-Rumayyan indicated to Rubenstein the FII is now an institution in the interview.

Carlyle owned a slice of the Domino's Pizza and Dunkin' Donuts in Saudi Arabia since 2011.   The Carlyle Group cashed out when that company went public in July 2022.   In a similar move the Saudi PIF took its Pizza Hut and KFC company public in November 2022.

Vision 2030 turned Saudi investing from night into day.  Al-Rummayan's PIF turned professional golf from day into night.

It took FTX founder Sam Bankman-Fried two months to go from Rubenstein's peer into a disgraced fraudster.  Al-Rumayyan's three year journey into villianry is not as apparent but it is driven by the same underlying pathology.  The Saudi PIF plans to be a $2 trillion fund by 2030.  It will get there by hook or by crook, using lots of smoke and mirrors to enhance the image of the Crown Prince along the way.

“They’re scary motherfuckers to get involved with,” he said. “We know they killed [Washington Post reporter and U.S. resident Jamal] Khashoggi and have a horrible record on human rights. They execute people over there for being gay. Knowing all of this, why would I even consider it? Because this is a once-in-a-lifetime opportunity to reshape how the PGA Tour operates. 

The PGA is being reshaped in the likeness of an unrestrained Saudi Crown Prince.  

Time will reveal the next David Rubenstein "peer" to descend into a villain.  Is he allowed to interview the "tax hating" side of himself?

Everybody Wants a Cut: Wealthion Goes PEU

Wealthion founder Adam Taggert interviewed Bob Long, CEO and partner of StepStone Group.  They discussed private equity investments and how investors with $1 million or more may wish to consider putting a portion of their holdings into a StepStone private equity vehicle.

Taggert's internet image is a financial host pulling for the little guy.  StepStone has $138 billion in assets under management but wants more.

 

The infomercial implied that people could get their money back and that their investment would hold its value as "realizations" (company sales) closely matched recent valuation marks.

Blackstone's REIT has been an example where neither is true.  Investors have been lined up to get their money back and "nine of fourteen BREIT deals are currently in the red."

Taggert missed two areas of journalistic exploration, private equity valuations and investment return calculations.  The PEU boys are known for fudging on both. 

In February Taggert previewed he would soon bring a private equity offering to followers.  He did so in an interview with Jim Rickards.

At the time I wrote:

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.

It turns out Wealthion gets a cut of business they steer to various registered investment advisors.

 Solicitor fees: 

The fees payable to us for these referral services depend upon the fee arrangement between our Firm and the unaffiliated RIA to whom you are referred. We will receive a portion of the unaffiliated RIA's ongoing account management fees as compensation for our solicitation or consulting. Our fee range is 25% to 35% of the fees charged to the referred client by the unaffiliated RIA. The fee shall be paid solely from the unaffiliated RIA and will be paid to us within 30 days of the unaffiliated RIA's receipt of the advisory fee from the client. The fee paid to us will not result in any additional charge to the client of the unaffiliated RIA.

Referred clients have no obligation to pay any compensation directly to Greylock Peak . Greylock Peak seeks payment of its compensation solely from the unaffiliated RIA to whom it recommends clients. Fees are only payable to Greylock Peak upon receipt of funds by the RIA from the prospective client(s).

The duration of payments from the RIA to Greylock Peak shall continue for as long as a given client remains a paying investment management client of the RIA.

There are other ties:

Greylock Peak is indirectly owned, through Greylock Holdings, LLC, by GBI, a precious metals commodity broker-dealer. Clients of Greylock Peak may engage GBI separately for access to its precious metals platform either directly or through their investment advisor. Greylock Peak is also affiliated with GoldSilver, also a precious metals commodity broker-dealer. A conflict of interest exists in that Greylock Peak has an incentive to recommend investment advisers who use GBI's and/or GoldSilver's precious metals platform for their clients. Compensation received by GBI and GoldSilver is separate and in addition to solicitor fees received by Greylock Peak.

This is how Taggert got access to General Wesley Clark for a recent interview.  Clark is a board member for Gold Bullion International (GBI).  Clark was a private equity underwriter (PEU) with Rodman and Renshaw.

Everybody has to make a living.  It's a shame the seemingly good guys want multiple cuts, some in perpetuity. It's the PEU way.

Update 6-17-23:  StepStone attended the RFK Compass Summer Investment Conference:

Clodagh Coghlan – Principal, Private Equity, StepStone Group

This invitation-only event convened key investment decision makers—leading institutional investors and fund managers—for three days of unparalleled thought leadership and disruptive programming around seeking alpha while doing good.

Update 8-12-23:  Adam Taggert from Wealthion interviewed Morgenson.  This is a shift from this StepStone interview on the benefits of private equity and the possibility of endorsing a PEU firm for followers.  In the interview he said "Sunlight is the best disinfectant."

Update 9-9-23:  Wealthion disclosed their business relationship with New Harbor. 

PEU Legend Interviews PEU Supernova

Berlin's SuperReturn conference saw Carlyle Group co-founder David Rubenstein interview spanking new private equity underwriter (PEU) Kim Kardashian.  Kardashian formed SKKY Partners with former Carlyle executive Jay Sammons. 

Kim hopes to help SKKY's affiliates win.  Kim K may be able to do what Sam Bankman-Fried could not, bringing greed and leverage to the masses.  Rubenstein interviewed Bankman-Fried several months before FTX and Alameda imploded.  

Who wants be an LP for SKKY Partners, a "next generation consumer and media PEU?"  Jay will be happy to take your money.

Carlyle's Acentra Health to Help Government Healthcare

A press release revealed two Carlyle Group healthcare companies, CNSI and Kepro, have merged and have a new name, Acentra Health: 

Our team of technology and business experts, skilled clinicians, and highly talented healthcare professionals work as one to help state and federal partners lead the way in accelerating better health outcomes for priority populations."

When Carlyle bought Kepro from Apax Partners PE Hub reported:

Apax Partners got Kepro from Nancy Ann DeParle's Consonance Capital.  DeParle was President Obama's White House health reformer.  DeParle was a PEU before her "public service" and afterwards.

Bain and Co gave a PEU healthcare update in April.  It stated:

Medicaid services: Medicaid enrollment tends to increase in downturns due to a rise in unemployment; outsourced service providers are also positioned to help state agencies effectively manage their costs and spending. For example, Carlyle expanded on this theme by merging Kepro with CNSI. Investors considering plays in Medicaid services should take note of the impact of potential enrollment redetermination in 2023. 

Carlyle cut its teeth on milking the federal wallet.  That should continue with Acentra Health.  The greed and leverage boys will not make healthcare better or cheaper(ManorCare).  They will get their cut.

Update 9-5-23:  Accentra Health CEO Todd Stottlemyer garnered a spot on Virginia Business 2023 Power List.  Carlyle can do that for their PEUple.  It helps that Governor Glenn Youngkin is a former Carlyle co-CEO and counts on Stottlemyer, who contributed $25,000 to the Youngkin campaign.  It's the PEU way.

Update 1-3-24:  NakedCapitalism did a great piece on the PEU boys bleeding healthcare firms and harming quality care.

Update 1-9-24:  Carlyle's Acentra bought  EAP Consultants, LLC (“Espyr”), a leader in workplace mental health and well-being programs.  Will they be able to undo the harms done to employee mental health by PEU ownership?

PGA Tour Sells Out to Saudis

Yahoo Sports reported:

...the PGA Tour, the DP World Tour and LIV Golf, the upstart breakaway tour funded by Saudi Arabia's Public Investment Fund, have agreed to merge and create a new entity to unify the tours.

The details are still sparse and incomplete, but the fact that the PGA Tour and LIV Golf have agreed to create a new entity after more than a year of acrimony and litigation is significant. The deal was negotiated in such a secretive fashion that not even the PGA Tour's players knew. LIV Golf CEO Greg Norman apparently found out in a phone call just before the announcement was made public.

The sole and exclusive financial investor in the new entity will be Saudi Arabia's Public Investment Fund.  Saudi Arabia's Public Investment Fund also retains the right of first refusal for any additional investment in the new entity. That, in effect, gives Saudi Arabia's PIF enormous power in dictating the scope, goals and direction of the new entity.

Golf is the now the shiniest sportswash gem in Prince Mohammed bin Salman's crown.  No pariah here, just a giant pair of gold truck nuts dangling from bin Salman's throne.

Like all good PEU and SWF deals the tax implications are minimized:

The PGA tour will continue to retain its status as a 501(c)(6) tax-exempt organization, and will retain so-called "inside-the-ropes responsibilities" of its events.

The greed and leverage boys want both money and image.  State sponsored industries now include professional golfers.  Are they ready to pay homage to their new owner?

The average citizen gets to pay more for gas to fund this deal.  Who's ready to cheer on higher oil prices?  

Golf, but LOUDER.  Gas, but HIGHER!

Update 6-7-23:  Many PGA players expressed concerns about the deal and called the PGA Commissioner a hypocrite.  It's amazing how tons of money can change one's principles.  Maybe the opposition will decrease when all the players get their set of gold MBS truck nuts.  Can they spare a few sets for the 9-11 families, who are legitimately disgusted by the PGA's grotesque sellout?

PGA players experienced the kind of duplicitous, selfish behavior of the people in charge.  You can't call it leadership because executives sold out their core beliefs and principles.  Lesson here is greed wins.  That's a sick and sad distortion, not close to any substantive transformation.

PEU Carlyle wants to exploit sports as well as Saudi Arabia's evil Crown Prince:

Update 6-8-23:  Twitter user Mr. Skilling tweeted yesterday:

On 9/11, Jimmy Dunne skipped work to play golf. 

66 of his Sandler O’Neill colleagues were murdered when Saudi-funded terrorists crashed a plane into the south tower. 

Today, he joins the Executive Board of a golf league funded by the same government that murdered his friends.

Dunne joined the PGA board to protect it from Saudi owned LIV.   Today he owned that justice looks different for his and the Crown Prince's kind of people.  They can just kill those they believe are guilty.

Dunne, speaking to Golf Channel on Thursday afternoon, vowed to “kill” anyone who “unequivocally was involved with it” himself.

There you have it.  The PGA and LIV really are like minded partners.  I wasn't much of a golf watcher before.  Now I'll skip their events.

Update 6-9-23:  Matt Stoller's BIG ran a piece on the sellout, which he views as comically monopolistic and gives it a zero chance of going through as announced.

Update 7-10-23:  One PGA board member resigned rather than support the Saudi buyout.

Update 7-11-23:  A Congressional hearing is being held on LIV's buyout of the PGA.  PGA reps said players would not be restricted to what they say about the Saudi Crown Prince or the Kingdom.  That's what got WaPo journalist Jamal Khashoggi killed.

Update 7-12-23:  The LIV-PGA deal includes a non-disparagement clause.  

Update 8-9-23:  PGA golfers learned that their voice makes zero difference.  PGA Chief Jay Monahan held his first meeting with players since the deal was announced.  Only 25 showed up.  

Update 11-29-23:  Tiger Woods insists a deal between the PGA Tour and Saudi Arabia’s Public Investment Fund, which bankrolls LIV Golf, “can’t happen again” without players being consulted. Tiger said of the deal:

So quickly, without any feedback or information. I was surprised that the process was what it was.

Carlyle's Arctic Glacier Avoids Debt Thin Ice

The Carlyle Group's Arctic Ice repaid over $400 million under a term loan due 2024.  Carlyle engaged PJT Partners to assist with the refinancing.  

Carlyle bought Arctic Ice from HIG Capital in March 2017.  PJT Partners was spun off from Blackstone, another politically connected private equity underwriter (PEU).  Blackstone founder Stephen Schwarzman owns roughly 5% of PJT Partners.

 

It's not clear where Arctic Ice received funds for the refinancing.  Did Carlyle's private credit step forward to fund their company?  Or did another PEU provide financing?  A new debt rating may reveal the answer.  

Update 6-5-23:  "In the first quarter, according to Carlyle Group, Inc., private credit funded 94% of buyouts by number and 70% on a dollar-volume basis."(Grant's Pub)

I'll fund your junk if you'll fund mine... 

Update 6-15-23:  PJT Partners could be held liable for allegedly failing to stop a former partner from defrauding a charitable foundation of $25 million in a fake investment scheme.

CFOs Are New Used Car Salesmen

Used car salesman have been portrayed as unethical for rolling back odometers to make their product more appealing.  WSJ reported similar manipulating with corporate earnings.

"...nontraditional earnings metrics are beating reported earnings by a lot more than last year, and a measure of the likelihood of earnings manipulation is at its highest level in about 40 years."

Both result in more money for the manipulators, higher commission for the used care salesman and increased executive compensation for the CFO.  

The accounting profession gave up its policeman role decades ago.  Now nontraditional measures dominate earnings reports.

The pressure to fudge is even greater if a corporation is private equity owned.  McKinsey said:

"borrowed capital means the risks are larger, the time to show results is shorter, and the scrutiny from investors is more intense."

The SEC and Justice Department avoided prosecuting widespread fraud after the 2008 financial crisis.  Corporate executives got the message, wink wink.  

The pressure for corporate executives to lie, cheat and steal is greater and the consequences are virtually nil.   That is the system our leaders created over the last few decades.  Politicians Red and Blue love PEU and increasingly, more are one.