Milken Institute Gives Rubenstein Two Slots

Carlyle Group co-founder David Rubenstein will speak on two different panels at the annual Milken Global Conference, which runs from April 28 to May 1.

Maria Bartiromo will moderate Rubenstein's Panel #1 on April 30, 2012.

8:00 AM - 9:15 AM

Big Goals, New Strategies and the Future of High-Level Philanthropy
Speakers:

Yuri Milner, Founder, DST Global
David Rubenstein, Co-Founder and Co-CEO, The Carlyle Group
Tom Steyer, Co-Founding Director, Center for the Next Generation; former Managing Partner, Farallon Capital

Moderator:   Maria Bartiromo, Anchor, CNBC


Philanthropy is changing around the world. From sharpening missions to increasing focus on execution, measurement, outcomes and impact, a social investment revolution is underway. With government budget crises and retrenchment in social services, attention is shifting to the private sector and the innovations and solutions that will drive philanthropy's future. Yet even the most successful philanthropists may lack the financial resources necessary to accomplish audacious goals. How are they tackling the great challenges? How do they leverage their resources to drive change? What are the impediments? Is collaboration achieving results? A group of global change agents who are taking philanthropy to the next level discuss their goals, frustrations and successes, and how they see philanthropy's next phase. 

Rubenstein will interview other guests on Panel #2 that same day.

2:30 PM - 3:30 PM

A Conversation With Gary Becker, David Rubenstein and Robert Rubin
Speakers:

Gary Becker, Nobel Laureate; Professor of Economics and Sociology, University of Chicago

Robert Rubin, Co-Chairman, Council on Foreign Relations; former U.S. Treasury Secretary

Moderator:   David Rubenstein, Co-Founder and Co-CEO, The Carlyle Group

In this session, Carlyle Group co-founder David Rubenstein interviews former U.S. Treasury Secretary Robert Rubin and Nobel laureate economist Gary Becker about global economic trends, public finance and the capital markets. Join us for a multifaceted discussion among three renowned leaders of finance.

Milken, always the promoter, framed the event as:

"Where the World Connects": Annual Milken Institute Global Conference Brings Tony Blair, Bill Gates, Al Gore and Other Leaders to Los Angeles.

Now that's a PEU headliner list.

Update 4-26-13:  Maria promoted her Milken slots on CNBC, including the Rubenstein one.  

Update 5-10-13:  According to one presenter at Milken (and recorded by one viewer), workers are "screwed"  It's the PEU way in the global race to the bottom on worker pay/benefits, taxes and regulation. 

PEUropean Dividend Recaps Back

FT reported:

In 2005, The Carlyle Group added debt to German car part maker Edscha and paid itself a €60m dividend. The 139-year-old company filed for bankruptcy in 2009, despite Carlyle reinjecting €25m in the company and amid wider difficulties for the German car industry following the financial crisis.

“If companies are left very levered for protracted periods, most will suffer from the effects of low investments and sporadic crises so that the business does not prosper,” Jon Moulton, founder of private equity firm Better Capital, said. “Failures of companies post-dividend recaps will definitely bring the private equity industry back into the political focus.”

Hardly,  politicians court private equity underwriters (PEU's) like The Carlyle Group and Bain Capital.  Sometimes they are one and the same.  Mitt Romney's Bain Capital conducted a dividend recap on WorldPay.  With a new $1 billion loan, roughly $500 million in dividends will be paid to owners.

Fed Minutes Pre-released to Carlyle Group

CNBC reported the early release of Federal Reserve Board minutes went to more than Congressional staffers and trade groups:

A list of recipients obtained by CNBC reveals that at least 12 banks, a Wall Street law firm, a hedge fund and a private equity fund were on the distribution list that got the minutes early.

The banks included Fifth Third, Citigroup, UBS, Barclays, U.S. Bancorp, Goldman Sachs, Wells Fargo, HSBC, BNP Paribas, BB&T, JPMorgan Chase and PNC.

Sullivan & Cromwell, one of the most powerful Wall Street law firms, also got the email. 

The email was also sent to King Street Capital Management, a hedge fund with $20 billion under management, and private equity firms The Carlyle Group and The Cypress Group.

CNBC provided no insights on who sent the e-mail early or why.  However, Bloomberg did:

Brian Gross, a member of the Fed’s congressional liaison staff, distributed the March 19-20 minutes of the Federal Open Market Committee meeting at 2 p.m. yesterday.  

The release was “entirely accidental,” Smith said. “This was a list of professional contacts that one individual had,” she said. “This group of individuals does not in any normal course receive any information early.” The mistake was discovered this morning, according to the central bank.  

How does one accidentally type and e-mail, address it their personal contacts, attach the minutes and press send?

Gross is a former staffer of former Senator Phil Gramm, a Texas Republican who was chairman of the Banking Committee from 1999 to 2001. 

Reuters added:

Long-time watchers of the U.S. central bank could not recall another incident when such a highly sensitive document was released a day early.

 
This isn't surprising under America's Government-Corporate Monstrosity, Eisenhower's MIC on trillions in federal steroids.  Carlyle Group co-founder Bill Conway likes a PEU tilted playing field.  How could an early release help Carlyle and its PEU brethren?  And how might it help Brian Gross navigate his next high paying job with the GCM?

Africa PEUbiquitous for Carlyle Group

BizCommunity reported:

The African Development Bank and The Carlyle Group will host their inaugural joint initiative called 'In the Board Room' program in partnership with the University Of Cape Town Graduate School of Business "UCT" in South Africa.

The 'in the Board Room' initiative is envisaged for global leaders in business to business schools and campuses across Africa to share their views with sub-Saharan students. During the meeting, senior members of the African Development Bank and The Carlyle Group will conduct discussion driven presentations on business development, ownership and management to UCT business students, alumni and faculty.

Ah, formative students will be indoctrinated into greed, leverage, mining political connections, negotiating settlements without admission of guilt and preferred carried interest taxation, making PEU's virtual nonprofits.

For how many centuries has the West raped Africa?  30% annual returns come on someone's back. 

The African Development Bank put $50 million into Carlyle's sub-Saharan Africa Fund.  That press release highlighted the "in the Boardroom" program:

AfDB and Carlyle will also jointly launch the “In-the-Board-Room” programme, an audio series targeted at African business students. The programme will provide more than 1,000 African business students with access to messages on inspirational leadership, a sense of strategic command and lessons in crisis management. 

Who can forget Carlyle's Rubenstein's inspirational message on frothy deals with easy debt terms as being "like sex?"  Carlyle's strategic command can be seen from Synagro's bribing public officials to SemGroup's billions in bad energy bets to ARINC's being banned from World Bank projects for nearly three years..

Crisis management is Carlyle's distinctive competency.  It helps when "business media" salivates for the slightest contact with a Carlyle founder.  They only seem able to produce puff pieces on modern day Robber Barons..

Carlyle's Lifecare lost 25 patients in the aftermath of Hurricane Katrina, a distinct failure to manage in a crisis.  Their legal defense was patients became wards of the federal government as soon as FEMA set up in New Orleans.

Under seven years of ownership Carlyle loaded LifeCare with debt, such that the company imploded.  In its bankruptcy filing LifeCare blamed Hurricane Katrina for its demise, not its PEU owners.

Carlyle Capital Corporation was the canary in the coal mine for the September 2008 financial crisis.  CCC imploded in March of '08, after which Carlyle ran from its carcass.

African students will likely not hear any of these stories.  Just as Rubenstein et al opened up Libya for Western financial interests, they'll open up Africa.  Will African leaders have better luck than Gadhafi? 

China Investment Corporation Has Eye on White House

Asian Investor reported on Gao Xiqing, President of China Investment Corporation.  Gao. a Chinese private equity underwriter (PEU), shares the gift of glib with fellow PEU's.

Pressed by the moderator on his next real estate deal, Gao quipped "The White House."  It got a big laugh from the audience

I wonder how it impacted other PEU funnymen, The Carlyle Group's David Rubenstein and Blackstone's Stephen Schwarzman.   It feels like this pair owned the White House since 2001.  Are they ready to flip it for a ten bagger?

NYC Invests $330 Million in Carlyle Group Fund

PEHub reported:

New York City also made a monster $330 million commitment to the latest flagship fund from the Carlyle Group, Carlyle Partners VI LP. The commitment also includes a sidecar fund, Carlyle Partners VI Side Car LP.

Mayor Bloomberg's NYC isn't the only public retirement fund to invest in Carlyle:

The Carlyle Group, which went public in 2012, has targeted $10 billion for its latest mega-fund, which it started raising money that same year.  So far, the fund has gathered an impressive array of limited partners, including the Illinois Teachers’ Retirement System, which committed $250 million, the Florida State Board of Administration, which pledged $200 million, the Michigan Retirement Systems, which committed $175 million, the Texas County & District Retirement System, which pledged $75 million, and the New Mexico Public Employees Retirement System, which committed $40 million.

The Carlyle Group's education on its tax structure revealed:

We basically shield our public unitholders -- we at least attempt to shield our public unitholders from state tax obligations, from effectively connected income so that they have a very simple K-1 that they have to accept as a partner in our partnership.

These stories came out the same day.  Who will connect the dots?  Carlyle wants public money but hates paying taxes.

LifeCare Now PEU Free

Law360 reported:

A Delaware bankruptcy judge approved the $320 million sale of LifeCare Holdings Inc. to private equity owner Carlyle Group LP Tuesday, overruling the U.S. government's move to nix the deal because the firm's credit bid didn't account for paying the tax bill generated by the deal.

The government objected to Carlyle's proposed asset acquisition on the ground that the cashless transaction would leave LifeCare unable to pay an estimated $24 million in capital gains taxes, rendering the estate administratively insolvent.

The tax bill is due to Senior Secured lender debt being much higher than the tax basis of LifeCare's assets.  How will this new higher tax basis work its way through Medicare reimbursement formulas for LTAC's?

Private Equity Underwriters love Uncle Sam's business, they just hate paying taxes:

The corporate tax base is eroding because many large businesses are able to avoid the corporate tax rules altogether and choose to be taxed as pass-throughs instead. Bain Capital, the Blackstone Group, the Carlyle Group and other large asset management firms are organized as partnerships, yet take in billions of revenue each year.

LifeCare 's sad history with The Carlyle Group is over.  Carlyle's long term PEU ownership drove the life out of the company.  LifeCare is in the hands of its "Stalking Horse" Senior Secured Creditors who may or may not pay the capital gains tax bill.