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?