BankUnited's PEU Cash In Part Deux

FDIC's Sheila Bair subsidized the private equity rescue of BankUnited with $2.27 billion in cash.  Private equity underwriters (PEU's) monetized their initial chunk of BankUnited a mere year after "saving it."  They're ready for Monetizing:  Round 2.

Among the largest PEU shareholders of BankUnited:

• The Blackstone Group, which owns 8.3 million shares of common stock, is selling 4.8 million shares. Some of the shares it would sell will be converted from Series A Preferred Stock.
• The Carlyle Group, which owns 13.7 million shares, would sell 4.8 million of them.
• WL Ross & Co., controlled by Palm Beach billionaire Wilbur Ross, would also sell 4.8 million of its 13.7 million shares.
• Centerbridge Partners, which owns 10.8 million shares, would sell 3.8 million of them. 

The shares priced at $25.25, giving $495 million to BankUnited's PEU owners.  This compares unfavorably to the $27 IPO price which brought in $780 million.  The two offerings total $1.27 billion.  BankUnited's PEU owners invested $900 million.  They're already in the green with over half their initial shares left thanks to the FDIC. 

Carlyle Group Presents at Citigroup Conference

Seeking Alpha has the transcript, while Carlyle posted the slides.  Open two tabs and get caught up on Carlyle's PEU ways.

Obama's Second PEU Commerce Secretary?

Bloomberg reported:

President Barack Obama is close to choosing Chicago businesswoman Penny Pritzker, who led fundraising for his 2008 campaign, as his next commerce secretary, according to three people familiar with the matter. 

President Obama's Commerce Secretary latest nominee could come with a private equity underwriter (PEU) taint.  Former Secretary John Bryson served as Senior Advisor for KKR.  His term ended badly, with a car wreck and Bryson dazed and disoriented. 

Billionaire Penny Pritzker attended an early Obama White House state dinner.  She is an heir to the Hyatt Hotels fortune and founder, chairwoman and CEO of PSP Capital Partners.

Last August Pritzker sold over 1 million Hyatt Hotel shares for over $38 million in proceeds.  In a Bain Capital Mitt Romney PEU move a SEC footnote stated:

Represents shares sold for estate planning purposes by the Reporting Person to a limited liability company owned by a trust for the benefit of the Reporting Person.

Pritzker is a 53 year old billionaire.  I would venture any moves at her age are to take advantage of tax loopholes, before they're closed.  I can assure you Pritzker isn't alone. As for Superior ethics, a track record exists.

Politicians Red and Blue love PEU, mostly because they are one.

Ripe for PEU Bubble?

WSJ reported:

Conditions are ripe for a private equity bubble, according to a panel of buyout executives at Harvard Business School’s 19th annual Venture Capital and Private Equity Conference,

Bubble or condom?  The Economist reported:

Private-equity firms globally have nearly $1 trillion of “dry powder”, or unused funds, which they need to deploy for investments, according to Preqin, a research firm.

Might it bring another round of shameless excuses from the David Rubenstein's of the world.

Rubenstein is co-founder of The Carlyle Group, a private equity underwriter (PEU) with $170 billion under management.

Obama's Burwell Knows PEU

President Obama's nominee for OMB Chief comes from the Billionaire foundation side (Bill Gates and the Walmart's Waltons).  This means Sylvia Mathews Burwell likely heard PEU sales pitches.

Burwell is as insider as anyone can be at age 47.  Here's her bio from MetLife's 2012 Proxy Statement:

Sylvia Mathews Burwell, 46 (Director since 2004)

President, The Walmart Foundation

Professional Highlights:

•

President, The Walmart Foundation (Jan. 2012 – Present)

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The Bill and Melinda Gates Foundation, a private philanthropic foundation

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President, Global Development Program (Apr. 2006 – Dec. 2011)

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Chief Operating Officer (2002 – Apr. 2006)

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Executive Vice President (2001 – 2002)

•

Deputy Director, Office of Management and Budget, Washington, D.C. (1998 – 2001)

•

Deputy Chief of Staff to President Bill Clinton (1997 – 1998)

•

Chief of Staff to Treasury Secretary Robert Rubin (1995 – 1997)

•

Staff Director, National Economic Council (1993 – 1995)

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Manager of President Clinton’s economic transition team (1992-1993)

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Staff, Clinton/Gore Campaign (1992)

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Associate, McKinsey and Company (1990 – 1992)

Other Professional and Leadership Experience:

•

Member of:

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Board of Directors, Council on Foreign Relations

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Aspen Strategy Group

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Trilateral Commission

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Advisory Group, Nike Foundation

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Advisory Board, Next Generation Initiative

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Advisory Board, Peter G. Peterson Foundation

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Professional Advisory Board, ALS Association Evergreen Chapter

Education:

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B.A., cum laude, Harvard University

•

B.A., Oxford University (Rhodes Scholar)

Ms. Burwell’s unique combination of experience in economics and government service and as a senior executive of charitable foundations with activities around the world gives her an informed perspective on global financial, business and philanthropic activities and diverse cultural considerations that may impact MetLife as a global provider of insurance and financial products and services. Her background and experience also enhance her understanding of the Company’s and MetLife Foundation’s contributions to civic, educational and charitable organizations.

The bolded names above work for private equity underwriters (PEU's).

Bill Clinton - Yucaipa, Teneo Capital
Al Gore - Generation Investment Management, Kleiner Perkins
Robert Rubin - Centerview Partners
Pete Peterson - Blackstone founder

Red and Blue love PEU.  MetLife's 2012 proxy showed Burwell received $260,000 in board compensation with control over 22,000 shares, 15,000 beneficially owned and 7,000 deferred shares.  However Burwell received 4,000 shares in 2012 for a total of 26,000. Those shares would fetch $920,000 at Friday's closing stock price.

Burwell will serve the Government-Corporate Monstrosity, Eisenhower's Military Industrial Complex on trillions in federal steroids and intent on global tampering.  She'll work for blue tinted PEU's and their sponsored politicians.  It's hegemony, where the greed and power boys, and an occasional girl, win.

Update 7-16-22:  Burwell is now President of American University and just hired former Carlyle Group Managing Director David Marchick as Dean of AU's business school.

NASDAQ Pays for Trades

FT reported:

The NASDAQ exchange is specifically targeting price-sensitive brokers that transact on behalf of retail investors, including UBS, Citigroup, Knight Capital and Citadel, and offering them rebates larger than the amount they take in for executing the trade. People familiar with the scheme confirmed the trades were lossmaking.

Will NASDAQ's move get exchanges in a rebate war over preferred customers?

NASDAQ believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, NASDAQ does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets.

 

How much of the savings will UBS, Citigroup, Knight and Citadel pass on to their few remaining retail customers?

If there is a long term rebate war, how might this explode?

“I don’t think it’s healthy for the business or the market for us to create a price war in a negative margin area,” said one of these people. “It’s not a sign of health. It’s a desperate situation.”

Does Uncle Sam consider NASDAQ too big to fail?  Recall The Carlyle Group recently held talks with NASDAQ.  Uncle Sam subsidized Carlyle's "rescue" of BankUnited to the tune of $2.27 billion.  That's before fees and dividends.

The NASDAQ "loss leader" situation bears watching.

Carlyle's Long Road to Monetizing ARINC

The Carlyle Group planned to monetize affiliate ARINC in 2010.  First it was an outright sale, then an IPO.  Neither occured.  Carlyle sold ARINC's defense division to affiliate Booz Allen Hamilton in 2012 for $154 million.  Rest assured Uncle Sam will pay.

The outright sale option is back.  JP Morgan and Evercore will shop ARINC for Carlyle.  A private auction will be held this spring.  

ARINC kicked off 2013 with news of World Bank procurement violations.  Those netted a 33 month ban.  Will those kicking ARINC's tires find this perforation?  It's not Carlyle's first bribe, not will it be their last.  Greed and mendacity drive a wide range of behaviors, many unethical.