Carlyle Explains White House DeParle's PEU Phenomena

The Carlyle Group's revised S-1 states:

"a portion of the carried interest that the company receives is due to (former) employees and Directors."

There's another interesting fact:

In order to better align the interests of our senior Carlyle professionals and the other individuals who manage our carry funds with our own interests and with those of the investors in these funds, such individuals are allocated directly a portion of the carried interest in our carry funds. Prior to the reorganization, the level of such allocations vary by fund, but generally are at least 50% of the carried interests in the fund.

While Nancy Ann DeParle worked for CCMP Capital Partners, not Carlyle, she received CCMP associated distributions while President Obama's Health Czar/Deputy Chief of Staff.

Morgan Stanley Pays Carlyle TGI Premium

The Carlyle Group sold 5 million shares of Triumph Group (TGI) via a secondary offering.  The prospectus showed a maximum price of $54.50 and proceeds of $272.5 million.  Morgan Stanley went $1.35 million better:

Morgan Stanley & Co. LLC has agreed to purchase 5,000,000 shares of common stock from the selling stockholders at a price of $54.77 per share, resulting in $273,850,000 aggregate proceeds to the selling stockholders.

The extra proceeds could go toward repaying Carlyle's $35 million tab with the state of Texas, taken long before Carlyle sold Vought Aircraft Industries to Triumph.

Vought happens to be Governor Rick Perry's jobs MVP.  For $35 million Vought cut 35 jobs vs. adding 3,000.  That's $1 million Rick Perry paid per job eliminated.  As politicians are taught to lie boldly, the Governor and Presidential hopeful said Vought created 26,000 new jobs.  That claim is as patently laughable as Perry's Presidential run.

Enough disturbing history, why would Morgan Stanley pay The Carlyle Group a premium?

A different Morgan (JP) is one of three underwriters for Carlyle's IPO.  For those interested, Carlyle's revised S-1 hit the SEC website.  The omissions can be as good as the revelations.

Dynegy Holdings and Four Subsidiaries Declare Bankruptcy

SEC filings show:

On November 7, 2011, Dynegy Holdings, LLC (“DH”) and four of its wholly-owned subsidiaries, Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. (“Danskammer”) and Dynegy Roseton, L.L.C. (“Roseton”) (collectively, the “Debtor Entities”), filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York, Poughkeepsie Division (the “Chapter 11 Cases”).  Dynegy Inc. (“Dynegy”) and its subsidiaries, other than the five Debtor Entities, did not file voluntary petitions for relief and are not debtors under chapter 11 of the Bankruptcy Code and, consequently, will continue to operate their businesses in the ordinary course.

The Chapter 11 Cases were filed in accordance with a Restructuring Support Agreement (the “Support Agreement”), dated November 7, 2011, among Dynegy, DH and certain holders (the “Consenting Noteholders”) of an aggregate in excess of $1.4 billion of DH’s $3,370.3 million aggregate principal amount of outstanding unsecured notes and debentures comprised of: 8.75% senior unsecured notes due February 15, 2012, 7.5% senior unsecured notes due June 1, 2015, 8.375% senior unsecured notes due May 1, 2016, 7.75% senior unsecured notes due June 1, 2019, 7.125% senior debentures due May 15, 2018 and 7.625% senior debentures due October 15, 2026 (collectively, the “Old Notes”). The Debtor Entities’ proposed financial restructuring (the “Restructuring”), as outlined in the Support Agreement and the restructuring term sheet attached thereto (the “Term Sheet”), has the support of the Consenting Noteholders.

It seems Dynegy Holdings and four subsidiaries needed protection on off balance sheet transactions, five of which are listed in the filing.  Capital games continue via the use of LLC's and financial manipulation.  It's a PEU move. 

Vought Cash-In: Carlyle's Next Round

WSJ reported:

Triumph Group said 5 million of its common shares are being offered by investment fund and other entities associated with The Carlyle Group. Upon completion of the offering, Carlyle will own approximately 9.5% of Triumph's stock. The company, which had 49.1 shares outstanding as of Nov. 1, will not receive any of the proceeds. The stock was down 3.9% at $54.76 after hours. 

Triumph made the announcement via press release.  MarketWatch picked up the story after the close of trading.

I'm waiting for an SEC filing on the matter.   Might Carlyle use a portion of their $250 million in proceeds to refund Texas taxpayers for reneging on employment promises made by Vought Aircraft Industries, later acquired by Triumph?

Governor (and Presidential hopeful) Rick Perry's hairspray can't hold together his ridiculously inflated job-impact numbers, promised under Carlyle ownership.

As a virtual nonprofit,  Carlyle takes money from governments.  It rarely pays.

Update 11-8-11:  The prospectus is not on the SEC's website.  It must be obtained from Morgan Stanley & Co. LLC, Attn:  Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, telephone:  (866) 718-1649 or by emailing prospectus@morganstanley.com.

Update 11-9-11:  The prospectus made it to the SEC website. There was no mention of making Texas, much less making Texas taxpayers whole.

Hong Kong Hot for PEUs

WSJ reported private equity underwriters would gather en masse for the Asian Venture Capital Journal's Private Equity and Venture Forum in Hong Kong.

The list of keynote speakers is pretty impressive: Mr. Coulter; John Connaughton, managing director of Bain Capital; Howard Marks, chairman of Oaktree; Christopher Flowers, chairman of J C Flowers & Co; Henry Kravis, co-chairman of Kohlberg Kravis Roberts & Co.; David Rubenstein, managing director of The Carlyle Group; and Providence Private Equity CEO Jonathan Nelson.

Nick Bloy, managing director at Malaysia-based private-equity company Navis Capital Partners. “So understandably, practically every private-equity investor that one might wish to meet, or who wishes to meet you, is at the AVCJ Forum.”

Who wants to meet Christopher Flowers who helped turn MF Global from a staid investment banker into a dice roller, now bankrupt?  How about Henry Kravis, who siphoned $4.25 billion from HCA in special dividends before HCA's IPO?  Would they line up to meet David Rubenstein, co-founder of the virtual nonprofit Carlyle Group, which distributed nearly $15 billion to investors in 2011?

Recall China's the new financial threat, according to The Carlyle Group's Frances A. Finelli.  PEUs are their trainers in future financial terror.  Despite this fact, there will be no drone missile attack in Hong Kong. 

PEUs own politicians giving orders on who to summarily execute.  Captive militaries and homeland securities would rush to protect this crowd.

Yahoo to Become PEU-Hoo?

Reuters reported a mix of private equity underwriters and tech giants could pull a threesome with Yahoo! 

Other private equity firms interested in Yahoo include KKR, TPG Capital and Carlyle Group. Sources would not confirm if any of them had signed the confidentiality agreement, though a second person familiar with the situation said those three firms and Providence are "among the hottest firms" involved in the process. The New York Times reported late Thursday night that TPG had indeed signed the agreement.

Strategic parties including Alibaba, Microsoft Corp and Google, have also taken part in the still-developing discussions surrounding Yahoo, sources have said.

Private equity firms have indicated a willingness to commit around $1 billion in equity as part of a transaction, according to several people familiar with the matter.

Goldman Sachs is running the "comprehensive strategic review."  Why not sell to a virtual nonprofit like The Carlyle Group, whose charitable mission is greed?  Give a shout out for PEU-Hoo in our PEUniverse.

Carlyle Distributes Nearly $15 Billion to Investors in 2011

 

FT let the PEU out of the bag with their story on KKR's plummeting economic net income.  Private equity underwriters try to soften the blow of asset write downs with news about distributions to investors.  FT stated:

While KKR has returned $5bn to investors this year, it still lags behind another rival, Carlyle, which has returned almost three times as much to its limited partners year to date. Selling out of investments has become critical both in determining the attitude of limited partners in funds and in influencing dividends paid to public shareholders.

Carlyle's IPO, a major spurt in their Profitgasm, may be reigned in by plummeting asset values.  Carlyle's "Great Cash-In" may come to an end.

Recall Carlyle is a virtual nonprofit organization, at least they confessed to this status in their S-1.