Milken, Manchin and Marks: PEUs Have Taken Over

The crowning event on the last day of the Milken Global Conference is founder Michael Milken's interview of Oaktree Capital Management co-founder Howard Marks. They will discuss six decades of financial innovation, marked by the proliferation of private equity underwriters (PEU).  "Junk Bond King" Milken is considered a PEU founding father.

PEUs proliferated since 2000 under both Red and Blue White Houses.  Victory Park Capital was founded in 2007.  Former Senator and Vice Presidential candidate Joe Lieberman joined Victory Park as Chairman of its Executive Board in January 2014.  

This evening Blue Team Senator Joe Manchin will be attending a private event in the Los Angeles home of Howard Marks, co-founder of investment fund Oaktree Capital Management.  The event is sponsored by No Labels.  

No Labels National Co-chair is Senator and PEU Joseph Lieberman.

Politicians Red and Blue love PEU and increasingly, more are one. These Joes know it well.  Joe Manchin will be richly rewarded by the greed and leverage boys when he retires from Congress.

Update 5-3-22:  The Milken crowd believes there is only one way to solve the problems of the world, by their profiting grotesquely.

Update 5-5-22:  The Lever reported "Politicians have cut secret deals funneling retirees’ savings to financial firms — but new legislation would finally let the public see the details." 

Update 7-15-22:  Manchin keeps watching billionaire backs by opposing tax increases on the super wealthy.  Manchin is a hero to the PEU boys.  Many of Trump's billionaire backers are now supporting Manchin.

Update 7-18-22:  Manchin canoodles with billionaires to raise $1 million.  Serving the people who live outside West Virginia as Manchin's state has no billionaires. 

Updated 8-28-23:  Former Sen. Joe Lieberman said Sunday the No Labels group intends to select a presidential ticket in April in Dallas.  Lieberman is the founding chair of No Labels. 

Milken Global Conference Celebrates Connections

The Milken Institute Global Conference starts tomorrow with the theme "Celebrating the Power of Connection."  Connections got "Junk Bond King" Michael Milken's criminal conviction scrubbed.  There is no longer an official record of his committing major financial crimes, including securities fraud.

Carlyle Group co-founder and policy making billionaire David Rubenstein used his power of connection up and down Pennsylvania Avenue.  The White House address is 1600 Pennsylvania Avenue while Carlyle's corporate office is a mere five blocks away.

The greed and leverage boys hold Milken up as a founding father.  A smattering of private equity underwriters (PEU) will speak at the event.  Carlyle has two speakers on the official agenda:

KKR has three speakers covering four events:

Blackstone will present at two sessions but will be absent from a housing session, where they've had a huge impact on rising rents, late fees and evictions through affiliate Invitation Homes.

A whistleblower lawsuit alleges Invitation cheated California cities/towns out of millions by not getting building permits for renovations.

Apollo Global Management has two speakers, co-founder Marc Rowan and Scott Kleinman.  Rowan gets his own breakfast club session.

Themes for the event have included:

I suggest an underlying theme for the last few decades has been "Pardon me, but Greed is the way."  What happens at California Davos often ends up in Congressional bills.  Politicians Red and Blue love PEU and increasingly, more are one.

Update 5-2-22:  Jesse's Cafe Americain noted the Nordic Flash Crash and commented:

Seriously, how can one expect a multi-billion dollar trading platform for a global financial institution to bother with any safeguards against potentially systemic critical 'typos.'   LOL

The financial fourth estate was too busy swooning over the international cast attending the Michael Milken conference at the Beverly Hilton to be concerned about any of these market-busting, existential questions.

Update 5-5-22: The Lever reported "Politicians have cut secret deals funneling retirees’ savings to financial firms — but new legislation would finally let the public see the details." 

Update 5-7-22:  FT has a summary of Milk'em Global Conference.  The greed and leverage boys are having a sphincter moment as fellow PEU Jay Powell stopped spiking their punch-bowl and is purported to be administering doses of Narcan.   

Update 5-17-22:  German Allianz SE agreed to pay $6 billion and plead guilty to securities fraud for its Structured Alpha funds.  Reuters story stated "managers also inflated fund results to boost their pay through performance fees."  If they follow the Milken game plan a pardon could be in their distant future.

Kevin Hart Takes PEU Money

Abry Partners invested $100 million in comedian/actor Kevin Hart's new company.  

HARTBEAT said it would produce and distribute television and film content focused on "comedic storytelling" and that it was in various stages of development or production on more than sixty projects. 

The greed and leverage boys are rarely ha-ha funny.  Consider Abry affiliate Securus Technologies.  The following is from a 2015 post.

" ... an anonymous hacker who believes that Securus is violating the constitutional rights of inmates — comprise over 70 million records of phone calls, placed by prisoners to at least 37 states, in addition to links to downloadable recordings of the calls. The calls span a nearly two-and-a-half year period, beginning in December 2011 and ending in the spring of 2014. 

Particularly notable within the vast trove of phone records are what appear to be at least 14,000 recorded conversations between inmates and attorneys, a strong indication that at least some of the recordings are likely confidential and privileged legal communications — calls that never should have been recorded in the first place.

Abry did just fine on their Securus investment.  There are little to no consequences for any PEU antics or hijinks.  The PEU boys are more disturbing, like a twisted dark comedy.  That's the "got to have more" world.  

In January John Legend sold his music to PEU KKR.  Today BuzzFeed ran a report on the harm KKR's buyout did to developmentally disabled residents of group homes.

It's just another day...

… I had a dream last night,
The world was set on fire.
And everywhere I ran,
There wasn't any water...
The temperature increased,
The sky was crimson red,
The clouds turned into smoke,
And everyone was dead.

 

… But there's a smile on my face,
For everyone...
There's a golden coin,
That reflects the sun...
There's a lonely place,
That's always cold...
There's a place in the stars,
For when you get old.

 

Update 5-26-22:  Justin Timberlake is the latest artist to sell his music to the greed and leverage boys.

PEU Perpetual Dynasty Wealth

The greed and leverage boys don't want to pay taxes in their lifetime.  They want tax avoidance to be perpetual for their friends and relations.  They are policy making billionaires, thus elected officials cater to their whims and wishes.  

The sparsely populated state of South Dakota has become a haven for dynasty trusts.  

US politicians like to boast that their country is the best place in the world to get rich, but South Dakota has become something else: the best place in the world to stay rich.

Private equity underwriters (PEU) hate paying taxes.   Carlyle Group co-founder David Rubenstein paid 11.4% of his earnings in federal income taxes.  This policy making billionaire lobbied Congress multiple times to keep private equity's preferred carried interest taxation.

Politicians Red and Blue love PEU and increasingly, more are one.  They ignore public will which has long wanted the rich to pay their fair share in taxes.

Top U.S. Cabinet Officials Visit Ukraine

What are the odds two private equity underwriters with Pine Island Capital Partners would make the top two cabinet positions in President Biden's White House?  Secretary of Defense Lloyd Austin and Secretary of State Anthony Blinken did just that.  They traveled to Ukraine over the weekend to meet with President Volodymyr Zelenski.

Blinken and Austin informed Zelensky of more than $322 million in new foreign military financing for Ukraine, bringing the total US security assistance to Ukraine since the invasion to about $3.7 billion, the official said.

"It will provide support for capabilities Ukraine needs, especially the fight in the Donbas," the official said. "This assistance will also help Ukraine's armed forces transition to more advanced weapons and air defense systems, essentially NATO capable systems."

More than 50 Ukrainians were set to complete training on Monday to operate Howitzer heavy artillery that Washington has begun sending to Ukraine in recent weeks to reflect that fighting is now focused in the flatter, more open Donbas region.

Pine Island Capital Partners has two portfolio companies, Precinmac and InVeris Training Solutions.  

Precinmac is a critical supplier to prime contractors in the aerospace, defense, semiconductor, automation, and other sectors that rely on ultra-high precision manufacturing capabilities and expertise.

InVeris Training Solutions is the world leader in developing and deploying advanced technology-enabled virtual and live-fire training systems for military, law enforcement, and commercial customers.  The Company operates with a philosophy of safety through training across two segments – intelligent virtual and live-fire training systems. Its advanced systems have been deployed in over 130 countries. 

I imagine business has gone up for Pine Island Capital affiliates as a direct or indirect result of President Biden appointing them to his Cabinet.  Did Ukraine obtain any of their services in the $3.7 billion of U.S. military assistance announced to date?

Update 4-27-22:  Yahoo reported:

Ukrainian Minister of Foreign Affairs Dmytro Kuleba made this statement during a live stream on his Facebook page, "Evropeyska Pravda" reported. "We have entered a completely new phase, one which no one even thought about two months ago. We have entered a fundamentally new phase, which no one even dreamed of - the transition of the Armed Forces of Ukraine to NATO weapons, to NATO standards.

How might this drive business to Precinmac and/or InVeris Training Solutions?

“Precinmac has a long history of delivering value to customers through design assistance, precision manufacturing, and assembly, and we see an opportunity to further grow the business among aerospace, defense, semiconductor, and industrial companies,” said Admiral Michael Mullen, a partner at Pine Island and the new chairman of the board of Precinmac. 

The Chairman of InVeris Training Solutions board of directors is Pine Island Capital Partners Partner, and Former US Sen. Saxby Chambliss. 

Update 5-11-22:   Glenn Greenwald reported Congress upped the Biden budget request of $33 billion for Ukraine to $40 billion.  Most of that will be spent on weapons.  How much will Pine Island affiliates profit from these funds?

Carlyle Co-founder Introduces Jon Stewart for Twain Prize

Hollywood Reporter noted:

Kennedy Center chairman David Rubenstein opened the event with a nod to the seriousness of current events both at home and abroad, then added that (Jon) Stewart was chosen as this year’s Twain prize recipient as he’s not only a great humorist, but also a social commentator who is invested in the betterment of our country.

Jon Stewart joked “it’s the leaders. It’s not the Fresh Prince, it’s the crown prince....  Comedy is the bellwether, we’re the banana peel in the coal mine… Authoritarianism is the threat to art, theater, poetry…. What we have is fragile and precious, and the way to guard against it isn’t to change how audiences think, but to change how leaders lead.”

David Rubenstein co-founded The Carlyle Group, a politically connected private equity underwriter (PEU).  He has long been a policy-making billionaire.  Non-lobbyist Rubenstein used his Capitol connections to keep private equity's preferred carried interest taxation, doing so on more than one occasion.  These occurred despite decades of public-will in favor of the super rich paying their fair share in taxes.  A recent study revealed Rubenstein paid at a tax rate of 11.4%, the lowest rate of his PEU peers.

Steve Carell honored Stewart for “making sense out of the insane and finding joy in the darkness.”  Anyone working a PEU affiliate has long struggled to make sense of the insane. It's also good advice for those who understand the outsized influence the PEU boys have on public policy outside the light of transparency.   The greed and leverage boys operate in ways unseen and mostly unknown.

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

PEU Air Ambulance Vultures

New York magazine investigated the impact of private equity ownership on air ambulances.  It reported:

In 2010, Bain Capital bought Air Medical Group Holdings for $1 billion, only to sell it five years later for double that amount to KKR, which, in turn, merged the company with yet another air-ambulance provider, American Medical Response, under the name Global Medical Response. (Tracking this shell game can be dizzying. In the three years between Hoechlin’s air-ambulance flight and mine, Guardian Flight merged with REACH Air Medical Services; both are owned by Global Medical Response.) In 2017, American Securities drastically accelerated private equity’s takeover of the air-ambulance industry with its $2.5 billion purchase of Air Methods, the largest domestic provider of air ambulances. (In 2016, during its final year as a publicly traded company, Air Methods posted a $97.9 million profit on $1.17 billion in revenue, and the year before had paid its CEO $2.5 million in direct compensation, including stock options.) That purchase established the industry’s current landscape, in which two private-equity firms, American Securities and KKR, control almost two-thirds of the national market for air ambulances, according to Medicare data. 

As private equity tightened its stranglehold on the industry, it jacked up the already-high prices.  Between 2008 and 2017, the median price charged by providers for helicopter air ambulances nearly tripled, jumping from $12,500 to $35,900 per flight. 

The greed and leverage boys don't care if healthcare is affordable to citizens.  They don't want to give up their preferred carried interest taxation.  They want more and they want it unceasingly.

Who could reign in these destructive private equity underwriters (PEU)?  Congress and state legislators could, but they won't.  Politicians Red and Blue love PEU and increasingly, more are one.

Update 4-24-22:  Former Clinton Labor Secretary Robert Reich wrote:

The raiders altered the “free market” to allow them to do this. That’s what the super-rich do. There’s no “free market” in nature. The “free market” depends on laws and rules. If you have enough money, you can buy changes in those laws and rules that make you even more money. (You can also get the government to subsidize you....

Reich's former boss aided a fledgling private equity industry during his eight years in office.  They had three decades to distort government to their will.  Elon Musk likes flaunting regulators in plain sight, a no-no for the greed and leverage boys who operate in the shadows.

Update 4-25-22:  Reuters reported KKR will shaft more patients and healthcare workers in the future:

Buyout firm KKR & Co Inc said on Monday it has raised $19 billion from investors for its latest flagship North America private equity fund, its biggest fund ever.

The fund, KKR North America Fund XIII, will make investments in businesses operating in sectors such as financial services, healthcare, retail, industrials, technology, media, and telecommunications, primarily in the United States and Canada.

Update 8-3-24:  I recently met a pilot with a PEU owned air ambulance service.  He said what's happening in his company was unthinkable ten years ago.  PEU degradation of people and service is remarkable in a most disturbing way.