Schwarzman Got $1.1 Billion from Blackstone

Blackstone Founder Stephen Schwarzman received $1.1 billion from his employer for 2021.

Schwarzman generated $941.6 million through dividends from his 19 per cent stake in New York-based Blackstone, according to a regulatory filing on Friday (Saturday AEDT). He also earned $160.3 million from compensation.

A SEC filing indicates:

Schwarzman Founding Member Agreement 

Upon the consummation of our initial public offering, we entered into a founding member agreement with Mr. Schwarzman. On March 1, 2018, we amended and restated this agreement, with the approval of the conflicts committee advised by independent counsel, to address certain retirement benefits to be received by Mr. Schwarzman. Mr. Schwarzman’s agreement provides that he will remain our Chairman and Chief Executive Officer (or, as determined by Mr. Schwarzman, our Chairman or Executive Chairman) while continuing service with us and requires him to give us six months’ prior written notice of intent to terminate service with us. The agreement provides that following retirement (or, if applicable, the date on which he ceases active service as a result of his permanent disability), Mr. Schwarzman will be provided with specified retirement benefits for the remainder of his life, including that he be permitted to retain his then current office and continue to be provided with administrative support, access to office services and a car and driver. Mr. Schwarzman will also continue to receive health benefits following his retirement until his death, subject to his continuing payment of the related health insurance premiums consistent with current policies. Finally, Mr. Schwarzman will also receive reimbursement for travel costs (including travel on personal aircraft) for Blackstone related business functions, annual home and personal security benefits, reasonable access to our Chief Legal Officer, reasonable access to certain events, legal representation for Blackstone related matters, and, subject to his continuing payment of costs and expenses related thereto, he will continue to be provided with offices, technology and support for his family office team at levels consistent with current practice. 

The agreement provides that, following Mr. Schwarzman’s termination of service, he or related entities will remain entitled to receive awards of carried interest at reduced levels until the later of February 14, 2027 or the date of Mr. Schwarzman’s death. The profit sharing percentage for any carried interest awarded in new funds launched after Mr. Schwarzman’s termination of service shall generally be set at 50% of the profit sharing percentage Mr. Schwarzman held in the most recent corresponding predecessor fund prior to his termination of employment or, in the case of new funds without a corresponding predecessor fund prior to Mr. Schwarzman’s termination of service, a profit sharing percentage set at 50% of the median of the aggregate profit sharing percentages held by Mr. Schwarzman at the time of his termination of service. 

While currently Mr. Schwarzman is entitled to invest in or alongside our investment funds without being subject to management fees or carried interest, this has been extended to continue until ten years following the date of Mr. Schwarzman’s death as to Mr. Schwarzman, his estate and related entities.  

Schwarzman benefited from private equity's preferred carried interest taxation.  Forbes reported in 2019:

It’s never been more clear that our country’s tax code is built to serve only those who have the most money. While hedge fund managers, private equity executives and venture capitalists benefit from the carried interest tax loophole, everyday Americans barely get a deduction for their student loan interest payments.

Schwarzman is one of America's policy making billionaires. Last year he received $611 million in compensation from Blackstone.  His compensation nearly doubled during a very difficult year for many Americans.  Obscene, absurd...you decide about Mr. Stone.

Update 2-28-22:   KKR co-founders Henry Kravis and George Roberts each received over $100 million from their PEU.  Over $67 million came from carried interest earnings.  Team Obama, Trump and Biden all had a chance to eliminate this tax break and none did.  Politicians Red and Blue love PEU and increasingly, more are one.  

Update 8-4-22:  Schwarzman is lauded as a hero for relaying a message to Canadian President Justin Trudeau on updating NAFTA.  There must be an effort to eliminate PEU preferred "carried interest" taxation.  Cue to the PEU hero stories and ignore the billionaire villains not paying their fair share for decades.

PEUs to Tap 401k Accounts

Jacobin Mag reported:

When former president Donald Trump paved the way for his private equity donors to skim fees from Americans’ 401(k) retirement accounts, Joe Biden’s campaign denounced the stealth executive action and promised to oppose such changes if he won the presidency. But less than two years later, Biden’s administration just quietly cemented that same policy, delivering a gift to the Democrat’s own finance industry sponsors, even as federal law enforcement officials are warning of rampant malfeasance in the private equity industry.

If the greed and leverage boys want access to my individual retirement account I want a crystal clear picture of their fees.  They seem to have a problem with that.

Politicians Red and Blue love PEU and many are one. 

Update 2-26-22:  Employees have to make enough money to contribute to their 401k accounts.  UPS executives reduced part time worker pay by $5 an hour.  Ouch.

Blackstone Springs into Affordable Housing

Blackstone, the private equity underwriter (PEU) that helped make U.S. housing unaffordable, will enter the federally subsidized housing market via April Housing.

PEUs already have preferred carried interest taxation from Uncle Sam.  Affordable housing is but the latest way Blackstone et al pilfer the federal wallet while scrimping on paying taxes.  How much cash will April Housing shower its PEU owner?  Rest assured, it will be significant.

Politicians Red and Blue love PEU and increasingly more are one.

Will Carlyle Group be Impacted by Trucker Strike?

Truckers from across the U.S. are headed to Washington, D.C. home of The Carlyle Group's main office on Pennsylvania Avenue.

One trucker said they plan to tie up the interstate loop around D.C.  

“We will be along the beltway, where the beltway will be shut down.” said trucker Bob Bolus, an organizer. “If they can’t get to work, jeez that’s too bad.”

That loop runs through Virginia and Maryland, each with Republican Governors.  Maryland Governor Larry Hogan has state troopers on the ready to keep traffic moving.  Former Carlyle Group CEO Glenn Youngkin is the new Governor of Virginia. 

Carlyle has a hybrid work model, work in office-work from home for D.C. area staff.  It's not clear how many employees will be impacted by the planned strike or how many of their calls Governor Youngkin will take.  

"The governor is monitoring the situation and has directed the secretary of transportation to work with the appropriate agencies to ensure all travelers are able to make it safely through Virginia," a spokesperson for Virginia Governor Glenn Youngkin told FOX 5.

While at Carlyle Youngkin monitored rush hour traffic in Beijing.  How will he react to out of state truckers clogging Virginia highways and byways? 

Update 3-5-22:  The Truckers' Convoy is in Maryland and will head to D.C. on Sunday or Monday.   NBC's traffic helicopter warned of possible commuter disruptions.

Update 3-6-22:  The convoy will circle the beltway around Washington, D.C. twice today.  ZeroHedge reported "the convoy's plan Sunday is to drive slow (without stopping) around the Beltway twice before returning to the staging area in Hagerstown. The move will be repeated each day of the week until the convoy's demands are met." Is this an implied threat?   "Every day is going to elevate what we do."

Carlyle Milks Missoula for Final $4.13 Million

NBC Montana reported:

An item on the Missoula City Council committee agenda details an expected settlement with the Carlyle Group over any lingering litigation and a bad faith lawsuit.

The cost of the settlement is $4.13 million. City documents indicate all will be paid from the water utility.

Water officials plan to issue bonds to pay that bill. It will add annual debit service payments of $318,000 which the city says can be paid from existing rates.

 Public-private partnerships can leave a bad taste that lasts a long time.

DeParle's Consonance Capital Does Pharma Deal with Carlyle Group

Former Obama White House Health Reformer Nancy-Ann DeParle's Consonance Capital monetized Orsini Specialty Pharmacy by selling a stake to The Carlyle Group.  Axios reported:

Orsini manages the handling and service requirements of costly and complex pharmaceuticals, with a particular focus on ultra rare drugs that oftentimes serve patient counts in the thousands.

Offerings include dispensing, distribution, reimbursement, case management services, among other personalized, therapy-specific services.

Carlyle did a press release on the deal.  It did not mention the deal price or how much PPACA author DeParle personally profited.   

Consonance Capital sold Enclara Healthcare, a hospice pharmacy provider and benefit manager to Humana in 2020.  Humana's press release also failed to provide the purchase price or how much Nancy Ann DeParle profited.  

Humana's Annual Report for FY 2020 revealed:

In the first quarter of 2020, we acquired privately held Enclara Healthcare, or Enclara, one of the nation’s largest hospice pharmacy and benefit management providers for cash consideration of approximately $709 million, net of cash received. This resulted in a purchase price allocation to goodwill of $517 million, other intangible assets of $240 million, and net tangible liabilities assumed of $13 million.

Nearly 73% of the purchase price went to goodwill.  Since that time Humana decided to monetize its hospice and community care division.  It's not clear if Enclara will go with Kindred Hospice when it is sold yet again.

President Obama knew his White House Health Reformer was a deal maker, who'd personally made a fortune prior to her appointment.

While in the role of White House Health Reformer DeParle received a residual private equity payout from a medical imaging company.  The firm was never mentioned in any of her prior financial disclosures.

MQ Interholdings, LLC (share of proceeds of earn-out of 2007 sale of CCMP portfolio company)

Her capital gain from the sale of MedQuest, a medical imaging company, was $6,825.  

Rest assured PPACA designer DeParle made massive profits on Consonance's flipping of Enclara and part of Orsini.  This occurs while your medications become more unaffordable and less available.

Wolf Jordan Belfort Offers Crypto Event

The Wolf of Wall Street Jordan Belfort will host a two day event for ten people wanting to improve their cryptocurrency, DeFi and NFT investing chops.  Belfort was convicted for securities fraud and money laundering

DDW reported:

Since being released from prison in 2006, Jordan Belfort has left behind the world of brokerage and has become a traveling motivational speaker, delivering seminars and speeches on everything from sales advice to getting into the entrepreneurial mindset.

Add crypto to his seminar topic list.  Belfort quickly made a splash in Miami where he will host those tem people at his house.. 

How did Michael Milken, Jordan Belfort and the Tinder Swindler resurface after harming lots of people with their financial crimes?   It's a Catch 22 given:

Milken served 22 months of his ten year sentence and authorities let him keep most of his grossly outsized fortune.

Belfort "was sentenced to four years in prison and served 22 months in prison....  At the end of his career as a stockbroker, he was a regular user of ‘22 different drugs." 

The Tinder Swindler served two years in prison in Finland for conning three women.  He ramped up his fleecing skills after his 2017 release.  His larcenous and fraudulent behavior is chronicled in a Netflix film.  Simon Leviev is also a motivation speaker who says he made tens of million from bitcoin and real estate.

Three former fraudsters have their sights set on crypto, defi and NFTs. 

They can all sell anything.  Are you buying?

Update 5-27-22:  Belfort's skill at separating people from their money is a league above the rest.

Update 8-2-22:  A number of FDIC insured banks ran with the crypto devils and may go under as a result.  How this is remotely OK is a question one should ask David Rubenstein and his former employee Jerome Powell/