KKR chiefs ponied up $300 million for one of their poorly performing private credit funds. It brought back memories from Fall 2007.
A Guernsey-based mortgage investment offshoot of the private equity firm Carlyle has been forced to seek a $200m (£100m) lifeline from its US parent as it struggles to meet commitments to its lenders.Carlyle Capital Corporation went on to implode in March 2008. Financial crisis occur when the big money boys no longer trust one another to make good on their debts (bets).
Milken Global Conference had a private credit cheerleading session. Host Michael Milken interviewed BlackRock's Larry Fink and Brookfield's Bruce Flatt. They minimized the risk of investment default at the start of the interview.
Milken cited Silicon Valley Bank's mismatch of long term holdings and short term financing of those assets as the primary cause of its failure. He omitted the bank run, juiced by TechGod depositors such as Peter Thiel.
Both Fink and Flatt shared the percent of their assets that are redeemable on a quarterly basis, less than 1% to a fraction of that. This showed "the strength of these organizations."
A private credit run cannot occur due to the small relative size of their whole portfolio. Really? I hope a former Carlyle Credit Corporation investor was in the audience to share otherwise.
Milken also failed to note that smart money started the private credit runs at various funds, family offices and sovereign wealth funds. If they want out, I as a small retiree should do likewise.
The three men noted that ten trillion dollars will be spent to rewire the world. An enormous amount of capital will be used and these guys want you to believe it will all work out just fine for those on the upper part of the K. The lower part of the K they did not address. It is not their care or concern.
Milken is one of the annual gatherings of the powerful and connected, alongside the World Economic Forum and the annual Bilderberg Group gathering. The world is being remade by power hungry, greedy private equity underwriters (PEU) and TechGods. Elected officials are their enablers.
Politicians Red & Blue love PEU and their new TechGod/CryptoBro brethren. Increasingly, more are one. For that, the common person suffers.