Sunday, December 31, 2023

PEU Tepper's Latest Tantrum


Carolina Panters owner and billionaire David Tepper threw a drink on a Jaguars football fan.  The NFL is aware of the video.  

Tepper is "completely untouchable as a person of his financial and social stature."  The story went on to say, "When you’re this wealthy in America, this is, sadly, one of the perks afforded to you." 

Tepper is a private equity underwriter (PEU).  Sports Business Journal reported in 2021:

NFL Panthers Owner David Tepper has become the "founding investor for a private equity firm that plans to invest in growth companies, special situations and the media and sports sectors," according to Miles Weiss of Bloomberg News. 

The firm, Andalusian Private Capital, was "co-founded by one of Tepper’s most trusted execs," Jeffrey Kaplan, who "helped his one-time boss make the record-setting" $2.3B acquisition of the Panthers. 

Andalusian, with about $800M in assets, "will invest on behalf of Tepper and more than 10 family offices who are banding together to do their own transactions rather than committing capital to private equity firms." 

His financial machinations include declaring bankruptcy for the Panthers new practice facility in Rock Hill, South Carolina.

The PEU boys have been pissing on little people for decades.  Was Tepper's drink a Mountain Dew?

Update 1-4-24:  The NFL fined Tepper $300,000.  In a statement he attributed his behavior to "being passionate" about his team and said he regretted it.  Some people regret being caught.  It's not clear if PEU Tepper fits into this group.

Thursday, December 14, 2023

FDIC Ushers in Alternatives Era with BX


The unwanted loans from failed Signature Bank landed in a public private partnership.  The private portion includes Blackstone, a storied private equity underwriter (PEU), and a Canadian pension fund.  The public side is the Federal Deposit Insurance Corporation (FDIC).

The FDIC press release stated:

Hancock JV Bidco L.L.C. (Hancock), an entity indirectly controlled by Blackstone, Inc. and other investors, paid $1.2 billion for a 20 percent equity interest in SIG CRE 2023 Venture LLC (Venture), a newly formed entity wholly owned by the FDIC–Receiver. The FDIC–Receiver will retain an 80 percent equity interest in the Venture. The FDIC–Receiver contributed to the Venture approximately $16.8 billion in CRE loans collateralized by office, retail and market–rate multifamily properties.

Hancock will be responsible for the management, servicing and liquidation of the Venture’s assets. Hancock will also be required to manage the portfolio.

And what fees will Blackstone/Hancock earn on the management. servicing and liquidation of SIG CRE 2023 assets?

The public side put up cash for the JV.

..the FDIC–Receiver provided financing equal to 50 percent of the Venture’s value..

PEUs backing failed banks?  The FDIC hasn't been this generous since Sheila Bair gifted BankUnited to The Carlyle Group, Blackstone, Centerbridge and WLRoss. 

It is the era of alternatives, complete with a campy holiday message blatant PEUmmercial.

Youngkin's Potomac Yard vs. Harbor Island


Virginia Governor Glenn Youngkin announced plans for the public to subsidize yet another billionaire via a new sports facility.  The beneficiaries are Washington Capitals and Wizards owner Ted Leonsis and his fellow partners, many of them private equity underwriters (PEU).

The project "will be financed through a proposed Virginia Sports and Entertainment Authority, which the General Assembly will be asked to approve in January. The authority would buy the land for the district from JBG and develop its portion of the project."

Youngkin was co-CEO of The Carlyle Group when it abandoned its lead developer role for the planned Corpus Christi port expansion, another public-private partnership.   There was no fanfare when Carlyle dumped the Harbor Island expansion on its partner The Berry Group.  

Potomac Yard will be rebranded National Island in the redo.  It would have been too rich for it to be named Harbor Island.  Nobody runs faster from failure than Glenn Youngkin.

Politicians Red and Blue love PEU and increasingly, more are one so they can take public money and steer it to their peers.

Wednesday, December 13, 2023

Shuttered Smile Direct Club: CDR Affiliate

Forbes reported:

SmileDirectClub shut down operations last Friday, leaving patients confused about the future of their dental health—and their payment plans—but the company advised customers to seek future care from local dentists, continue making payments for their treatments and said the status of refunds is still in limbo.

Surprised?  Private equity underwriter Clayton, Dubilier and Rice wasn't.  CDR trimmed their SmileDirect stake beginning with the company's IPO.


Nashville Post reported on CDR selling its remaining stakes: 

A New York-based investment firm that in 2021 was SmileDirectClub’s largest institutional shareholder has dumped the remainder of its holdings in the Nashville-based dental company.

PEU ownership seems bad for dental care.  The Carlyle Group bankrupted Church Street Dental and now CDR backed SmileDirectClub produced lots of frowns.  

A U.S. Senate Committee may wish to broaden the scope of their inquiry into damage done by PEUs in the healthcare arena.

I don't expect them to given politicians have been an accommodating lot for the greed and leverage boys.  Politicians Red and Blue love PEU and increasingly, more are one.

Tuesday, December 12, 2023

Meanwhile is Crypto PEU

The Block reported:

Meanwhile Group, a Sam Altman-backed crypto startup, has launched a bitcoin private credit fund via its investment management subsidiary Meanwhile Advisors amid the ongoing crypto rally.

Fund principals are based in Austin, Texas.  Fees are remarkably similar to private equity underwriters (PEU).

Why would someone with access to AI want to back a bitcoin private credit fund?  Surely Mr. Altman knows the dirty role bitcoins is playing across the globe.


The man who wants you to trust his artificial intelligence offerings wants you to put your retirement kitty into a fund targeting a 5% return on bitcoin holdings.  

Net out the 2% management fee and the 20% carried interest (one fifth of five percent is one percent) and investors end up with a 2% annual return.  

I don't see real people putting money into Meanwhile.  The Silicon Valley "live forever" crowd may invest but they aren't known for their loyalty.  A company press release stated:

In the coming months, Meanwhile Group aims to develop a comprehensive range of financial products denominated in cryptocurrency, including term life insurance and accidental death coverage in BTC.

And how many state insurance regulators are going to allow such products?

Meanwhile may wish to offer ransomware coverage.  They'll have what the crypto-crooks want.  Anonymity.  Speed.  Access.  Bitcoin.

Update 12-13-23:  FASB (financial watchmen) turned away from bitcoin crime with a crypto update to their accounting standards.  The update includes:

  1.  Meet the definition of intangible asset as defined in the FASB Accounting Standards Codification® 
  2. Do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets   (what about dollar or gold backed crypto?)
  3. Are created or reside on a distributed ledger based on blockchain or similar technology 
  4. Are secured through cryptography 
  5. Are fungible  (until they are not)
  6. Are not created or issued by the reporting entity or its related parties. 

What about an investment in a crypto credit fund like Meanwhile which has many related parties?

Update 1-4-24:  Fourteen firms hope the SEC approves their applications to offer Bitcoin ETFs.

Thursday, December 7, 2023

Rapidly Rising Pharma Price for Lead Poisoning Drug


CNN Health
reported that yet another pharmaceutical company took an old drug and jacked up the price for manufacturing the product.

The new version costs almost 10 times as much as the imported version, about $32,000 per course of treatment.

Rising Pharmaceuticals received FDA approval in August for the drug.  Many gross pricing situations are associated with private equity underwriters (PEU).  Rising's sponsor is H.I.G. Capital.  

Generics Bulletin reported:

December 2021:  Through a transaction valued at approximately $56.4m, the private equity giant H.I.G. Capital has acquired Suven Pharma’s 25% stake in Rising Pharma Holdings.

The company's press release stated:

Rising Pharmaceuticals develops and markets generic and specialty branded pharmaceutical products across various therapeutic categories. The Company employs an asset-light model with a fully outsourced third party network, which provides robust capabilities across multiple dosage forms. With a diversified portfolio of over 125 products and the ability to quickly commercialize complex molecules, Rising Pharmaceuticals is strategically positioned in the U.S. pharmaceuticals market. H.I.G. has partnered with Vimal Kavuru, CEO of Rising Pharmaceuticals, to continue the Company’s strong track record of growth and to support new initiatives, such as M&A and new product launches.

H.I.G.’s investment in Rising Pharmaceuticals represents its latest transaction in the pharma services sector. Other active H.I.G. pharma services investments include Aspire Pharma, BioVectra, Leiters and Taconic BioSciences.

The impact of the huge price rise is hospitals cannot afford to stock the lifesaving drug.  

The greed and leverage boys infected healthcare decades ago.  PEU Report did numerous posts on KKR-HCA, Carlyle Group-ManorCare,  President Obama's PEU healthcare reformer and surprise medical billing (PEU sponsored).

Famed investor Marc Cohodes noted:

Senators launch bipartisan probe of private equity's growing role in U.S. health care.

It's about damn time.  The PEU infection has gone on so long the system may be septic.

Wednesday, December 6, 2023

Wizards of Crypto

 

Former FTX CEO Sam Bankman-Fried invested in Paxos, as did Carlyle Group co-founder David Rubenstein (through his family office Declaration Partners).  Paxos recently won approval for stablecoins in Dubai, as well as Singapore.

When Rubenstein interviewed SBF in September 2022 neither man disclosed their Paxos investment, nor did they share that SBF asked Rubenstein to invest in FTX.  FTX imploded in November 2022.

Rubenstein later shared SBF's investment proposal wasn't PEU grade.  PEU stands for private equity underwriter.    

The public has soured on cryptocurrencies with nearly twice the number of people believing crypto is mostly harmful vs. beneficial to society.


CryptoNews reported:

Paxos, a New York-based regulated blockchain firm behind stablecoins PYUSD, BUSD and USDP, appears to be the entity that overpaid $500,000+ to move just 0.074 BTC (~$1,911 at that time) to Binance.

BitCoin.com reported:

On Thursday, August 17, 2023, the Dubai-based digital currency exchange Bybit said it will list Paypal’s new stablecoin, PYUSD.  Paypal’s partnership with Paxos Trust Company “underscores the rigorous regulatory approach and commitment to compliance, which are paramount in this evolving landscape.”

UnchainedCrypto reported:

Nasdaq-listed Coinbase alerted users to a subpoena it received from the U.S. Commodities and Futures Trading Commission (CFTC) concerning crypto exchange Bybit.
...Coinbase said it would be forced to respond to the CFTC with information on those users’ exchange accounts. So far, it appears that the recipients of the email were customers that interacted with the Bybit exchange from their Coinbase accounts.
Bybit, an exchange headquartered in Dubai, does not legally offer its services to users based in the U.S.

BlockchainDXB reported:

Since Monday, Paxos, the issuer of the $16 billion Binance USD (BUSD) stablecoin, has burned more than $700 million of BUSD tokens. Paxos Treasury crypto wallet transferred $703 million worth of BUSD tokens to a burn address within 27 hours starting Monday morning, essentially removing the coins from circulation.

In the fall of 2022, Bloomberg reported that Circle complained to the New York State Department of Financial Services that blockchain data showed that Binance did not have enough reserves to back up the BUSD tokens it had issued through Paxos. Binance reportedly supported $1.7 billion of BUSD using collateral worth only $100 million.

The Justice Department recently announced:

Binance Holdings Limited (Binance), the entity that operates the world’s largest cryptocurrency exchange, Binance.com, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).

“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”

So who is behind the curtain trying to save this nonsense? 

Lobbyists, law breakers and PEUs oh my....

Update 12-7-23:  FT reported:

...Binance has used aggressive tactics to solicit people to use its services in some of France’s most deprived areas.

There's always a mark.

Update 12-14-23:  Unlimited Hangout reported:

In 2022, Bank Leumi was the first Israeli bank to enable crypto trading. They partnered with the U.S.-based company, Paxos because “the company holds several licenses to operate with Bitcoin, altcoins, and blockchain technology…[and] has managed to consolidate important partnerships with PayPal, Revolut, and the Bank of America.” It’s worth noting that, a few years ago, Bank Leumi was under investigation for helping many diaspora Israelis launder their money and eventually admitted “that it conspired to aid and assist U.S. taxpayers to prepare and present false tax returns to the Internal Revenue Service (IRS) by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world.”

Update 1-3-24:  No word yet on Paxos handling Rick Flair's brand spanking new Wooooo!Coin

Tuesday, December 5, 2023

Monied Voices Win Over and Over

The voiceless hoards expand in numbers every day, minimized by the politically powerful super rich.  Even rich and popular professional golfers had no say in a bizarre deal the PGA reached with a Saudi owned rival golf tour.

At Harvard University:

"corporate interests are undermining research and academic freedom to the detriment of the public."

Harvard produced many of the politically powerful super rich   A fired researcher referred to the Facebook documents revealed by whistleblower Frances Haugen:

"I believed, honestly, that these were the most important documents in internet history,” Joan Donovan said in an interview Monday. “Our role as academics is not to play favorites. It’s not to do P.R. It’s to tell the truth, no matter how uncomfortable it makes us. And unfortunately, I lost my job for it.”

Anyone who has worked for a private equity underwriter (PEU) knows "death by a thousand cuts."  The researcher claimed Harvard executives:

“made it so that I couldn’t hire and I couldn’t start doing projects,” halting her fundraising, barring her from holding conferences with more than 30 attendees, and preventing her from launching "a podcast because he didn’t want to, quote unquote, raise my public profile.” She said that led her to halt media interviews and publish opinion pieces.

“Our plan was to go at the elections in 2024," Donovan said. "I had raised. $4.5 million at one point so that we could do our work through 2024.”

A Charlotte sports reporter wrote in a column:

that Tepper is a “hedge-fund billionaire with no clue as to how to run a football team.”

For that he was shunned in a press conference 

“I’m very unhappy w/the Panthers for getting frozen out of asking a question at the David Tepper press conference,” Fowler tweeted. “Sat in front row; raised hand high; wasn’t called on; protested to no avail. Felt like it was purposeful.”

Tepper does know how to take public money.

_____ doesn’t want to be challenged. ______ doesn’t want to be tested. Those who are assigned with protecting him probably don’t want to get chewed out after the fact for giving (as _______ might say) “that asshole small person” a chance to try to embarrass ______ publicly.

The pattern is a few people with obscene amounts of money are going to determine things.  The rest of us are on a ride and it could very well throw us off.

Update 12-31-23:  David Tepper threw a drink on a Jaguars football fan.  The NFL is aware of the video.  Tepper is "completely untouchable as a person of his financial and social stature."

A story went on to say, "When you’re this wealthy in America, this is, sadly, one of the perks afforded to you."  The PEU boys have been pissing on little people for decades. 

Update 1-4-24:  The ultra wealthy hold assets that produce very little in tax revenue.  They also seem quite skilled in getting public funds to subsidize their enterprises.

Monday, December 4, 2023

Arrested Former Diplomat is PEU


The Guardian
reported:

A former American diplomat who served as US ambassador to Bolivia has been arrested in a long-running FBI counterintelligence investigation, accused of secretly serving as an agent of Cuba’s government.

Manuel Rocha, 73, was arrested in Miami on Friday on a criminal complaint and more details about the case are expected to be made public at a court appearance on Monday

Rocha is on the board of Clover Leaf Capital Corp, which began as an SPAC under the sponsorship of Yntegra Group, an investment group specialized in private equity and high yield transactions.

Private equity underwriters (PEU) brought us "policy making billionaires" and non-lobbyist lobbying, where those billionaires received preferred access to elected officials.  Did Mr. Rocha get ahead of himself in advocating for Cuba?  Did he assume he could just meet with elected officials like Carlyle's David Rubenstein and Blackstone's Stephen Schwarzman?

Clover Leaf Capital's initial SEC filing in April 2021 included the following:

Ambassador Manuel Rocha, will be one of our Independent Directors upon the effective date of this offering. Before moving to Miami in 2002, he spent well over two decades as a US diplomat. His last post was as US Ambassador to Bolivia from July 2000 to August 2002. His Foreign Service career included assignments in the Dominican Republic, Italy, Honduras, Argentina and Cuba. Importantly, he was also Director of Inter-American Affairs in the National Security Council at the White House. Making the transition to the private sector, he worked for two law firms, established his own business development company bringing business opportunities from China to the Western Hemisphere, worked for a private equity firm based in Argentina, and headed Corporate Affairs for Arcos Dorados, which owns most of the McDonald’s restaurants in Latin America. All of this before serving as President of BARRICK Gold’s subsidiary in the Dominican Republic from September 2012 to April 2018, which represented the largest foreign direct investment in the country exceeding 5 billion dollars. Since May 2018, he has served as the SVP for Global Corporate Affairs for XCOAL, one of the largest exporters of US origin coals for use in integrated steel mills, cement plants, and power plants throughout the world. He graduated cum laude from Yale University, earned a master’s degree in Public Administration from Harvard University and a Master’s in International Relations from Georgetown University.

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.

Clover Leaf signed a promissory note for nearly $1.4 million with sponsor Yntegra.  Did the same person sign both sides of that deal?  That would hardly be arm's length.  PEUs are not known for being above board.

In 2022 Rocha rejoined a Miami law firm, Foley and Lardner LLP.  Their announcement stated:

Ambassador Rocha also brings extensive insight into the hospitality and leisure, private equity and family office, and lobbying and strategic communications industries across Latin America, Europe, and Asia.

The firm's website no longer includes Ambassador Rocha in its people list.  Odd, given how highly the Foley and Lardner thought of Rocha just months ago:

"The addition of Ambassador Rocha to the Miami office comes at a most opportune time. As Foley continues to expand its presence in the Florida market with the addition of top lateral talent, his geopolitical renown will bolster our reputation for unparalleled client service across the state and into Latin America," said Mary Leslie Smith, managing partner of Foley's Miami office.

"Ambassador Rocha's decades-long track record and high-profile experience handling international relations will be a tremendous resource for our clients – both in Miami and across the globe," said Edward Burbach, chair of Foley's Government Solutions Practice. "His multinational company experience will bolster Foley's existing relationships in Latin America and continue to reinforce and expand the firm's international business offerings."

Surely Mr. Rocha's law firm kept him on the clean side of the law.  Was it his PEU dealings or something else that got him in trouble?  Time and the Justice Department may reveal the answer.

Inclusive Capital Partners to Shutter


Bloomberg
reported Inclusive Capital Partners is closing shop, selling assets and returning money to investors.  

Lynn Forester de Rothschild and Jeffrey Ubben co-founded Inclusive Capital Partners in 2020 alongside George F. Hamel, Jr. and Eva Zlotnicka.  

In addition to launching Inclusive Capital Partners, Ubben is also launching the Inclusive Capital Partners Foundation which will be dedicated to executing mission-driven philanthropy, focused on advancing economic, social, and environmental inclusion. 
In 2022 the firm described itself with:

Inclusive Capital Partners, L.P. ("In-Cap") is an SEC-registered Investment Adviser based in San Francisco, California. In-Cap seeks to positively leverage capitalism and governance in pursuit of a healthy planet and the well-being of its inhabitants. In-Cap seeks superior long-term shareholder value through active partnerships with companies whose core businesses either contribute to this pursuit or who are transforming their businesses to become more sustainable.
Times are tough for the greed and leverage boys (and girls).  It's bad when you can't make it with a Rothschild on board.

Sunday, December 3, 2023

Michigan Senate Candidate is PEU


Another private equity underwriter (PEU) is running for the U.S. Senate.  Sandy Pensler is a candidate for the Red Team in Michigan.

A 2018 news story indicated Pensler's previous candidacy for the U.S. Senate. 

Sandy Pensler, a former economics professor at Harvard and Yale, and the owner of private equity firm Pensler Capital.


Pensler Capital lists one current investment, Korex Companies.  A 2009 article stated:

A grueling fourteen-month long strike at the Korex Don Valley plant came to a bittersweet end this week.

This past Monday, the 110 or so striking workers at the port lands-area plant learned that Sanford (Sandy) Pensler - the facility's New Jersey-based owner - has declared bankruptcy.

Susan Broadbent, a 27-year powder packer, concurred.

"How can these things happen and the government (Canadian) not step in? We will never get over this," said Broadbent, whose husband Todd Short also worked there for 27 years.

"This is the worst time of our lives for this to happen."

"It was family here and I'm hoping to put my history here to good use," said Jamieson, who is easily recognizable for his Santa-like beard.

"It's hard to believe one man can do so much damage."

It's not hard when that one man is a private equity underwriter (PEU).  Pensler also worked for Lehman Brothers and legendary PEU Blackstone.

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

Saturday, December 2, 2023

Summers in Position to Create Next Societal Disaster


Former Treasury Chief Larry Summers set the table for the Fall 2008 financial crisis with his contributions toward repealing Glass-Steagall under President Bill Clinton.  That repeal enabled riskier products and unethical behavior within and amongst Wall Street banks.

Artificial intelligence company OpenAI appointed Summers to its board of directors so Larry will have another opportunity to lead society down a more dangerous road.  

Consider Summers' history advising crypto company Digital Currency Group.

In 2016, he began to advise DCG, holding a position that was alternately called senior adviser and advisory board member for over six years.

Flash forward to October 2023:

New York Attorney General Letitia James announced a lawsuit against Digital Currency Group (DCG), its CEO Barry Silbert, and DCG’s bankrupt subsidiary Genesis Global Trading for defrauding investors of more than $1 billion.
And two momentous failures qualifies Summers to provide fiduciary oversight at OpenAI?  Only in a PEU world.