Renowned hacker Vincenzo Iozzo sent Jeffrey Epstein an article about Blackstone's manufactured default strategy. Their fund would buy a credit default swap on a company and then pursue providing capital to that very company. In the borrowing provisions Blackstone's fund would specify terms that would trigger a credit default. Zing, the ticking credit default swap blows and becomes money in the bank.
The opposite is happening today. Private equity underwriters (PEU) like Blackstone are avoiding credit events by gating redemptions and packaging stale assets in continuation funds.
Sell to self (sister fund) at non-arm's length valuation avoids that credit event where the PEU might have to hand over the affiliate's keys to creditors.
A different Iozzo email to Epstein offered the serial sexual predator a chance to take an equity stake in crypto mining manufacturer Bitmain prior to its planned Hong Kong IPO. It turns out Vincenzo Iozzo is a private equity underwriter.
The Epstein files are a great window into our PEU world. Politicians Red & Blue love PEU and their new TechGod brethren. Increasingly, more are one.
