Milken Global Conference PEUnderway

Today kicks off the 2023 version of Michael Milken's version of Davos (World Economic Forum) where global tamperers gather for the purpose of outsized profits.  Who's advancing in a thriving world?  Not the common person who might be serving drinks or emptying trash cans at the event.

Private equity underwriters (PEU) are advancing in their insider world.  They comprise many of the institute's speakers.  Several PEU legends, Carlyle's David Rubenstein and TPG's David Bonderman, will enlighten others on the benefits of greed and leverage. 

Carlyle's new street-fighter CEO will speak as well as several other executives.  One heads Carlyle's opportunistic credit (distressed debt).  Lots of that around.

KKR and Apollo Global Management are also represented on the speaker list.

Apollo Health Ventures is but one of thousands of PEUs seeking to profit from ever increasing healthcare bills.

There are numerous greed and leverage boys from various firms on the speaker list but all need protection.  That's why Palantir is there, just like Davos.

The super-powerful and wealthy require special security and Peter Thiel's Palantir knows how to protect oligarchs.  PEU boys know how to milk'em and that requires political connections.

U.S. politicians Red and Blue love PEU and increasingly, more are one.  A former U.S. President removed Michael Milken's criminal record.  It's like his financial fraud never happened.  That's thriving!

Update 5-1-23:  Apollo Global Management CEO told Yahoo Finance that private equity was not immune to the siren call of liquidity (cheap)."  Apollo owns Yahoo.  

...the alternative asset manager's portfolio continues to get a lot of attention from market watchers, and rightfully so given the high-profile names it holds.

The story almost reads like an ad for Apollo.

Update 5-3-23:  Carlyle's CEO said the following from Milk'em (according to FT):

“In the investing environment broadly, I think this is one of the most complex times we’ve had,” Schwartz said at the Milken conference in Beverly Hills this week. “Many of the trends that we lived with are slowing if not reversing . . . I think that sets up an incredibly interesting backdrop, both economically, globally and in terms of the opportunity set.”

That means more back door takeovers like Brinton's and Mrs. Fields. 

Update 8-18-23:  As for that thriving world:

Ticketmaster will begin to sell “listening seats” that do not have any view

They do it because they can.  There is no counterbalance, no authority to prevent the crapification of everything. 

Update 8-2-24:  Thoughtful Money's Adam Taggart referred to "crapification" imposed by private equity owners in an interview with noted author Gretchen Morgenson. She provided a number of PEU cases where owners won but employees, customers and nearly everyone else lost.

PEU News 4-27-23

What's happening in the private equity world?  The plunderers remain busy:

Private equity firms Advent International, Bain Capital and TPG are reportedly looking to team up to place a bid for Subway, which is expected to sell for up to US$10bn.

Carlyle Group Inc (CG.O) is considering bringing in fresh backers for its investment in McDonald's Corp's (MCD.N) China operations.

The Carlyle Group, a US investment firm, wants a minority stake in Manchester United.

Private equity major Carlyle Group closed its latest Asia focused buyout fund at $950 million. 

IMG Academy in Bradenton, Florida, has been sold by Endeavor Group Holdings to private equity group BPEA EQT for a total of $1.25 billion.

First Republic Bank lost a wealth management team to Cresset Asset Management.  Cresset's founders came from private equity.

Financial worries are spreading from banking to insurance companies.  Boaz Weinstein believes the credit crisis is just starting in earnest.  He believes life insurance companies could be at risk for financial upheaval.

McKinsey noted last year "All five of the largest private equity (PE) firms by assets have holdings in life insurance, representing 15 to 50 percent of their total assets under management."

Former Biden Chief of Staff Ron Klain returned to his former law firms and will assist O'Melveny's private equity clients.  Satisfaction guaranteed! 

Biden Domestic Policy Advisor Susan Rice announced she would step down in the next month.  She will spend her summer pondering her next act.  Might private equity be her future?

A leading private equity firm claimed to be a climate leader (under the leadership of the current Governor of Virginia) while increasing emissions.

Youngkin to Steer More VRS Money to PEUs

Virginia Governor Glenn Youngkin employed leverage in the pursuit of outsized profits (greed) at The Carlyle Group.  Virginia Retirement System plans to employ leverage and steer more money to private equity, private credit and alternative investments.  

Glenn knows about non-recourse loans as nursing home giant went bankrupt under his watch.

Glenn also was in charge when abandoned its lead developer role for the Port of Corpus Christi's Harbor Island project.

Is anyone surprised that the Virginia Retirement System plans to roll the dice given its governor is a former private equity underwriter (PEU)?  They take care of their own.

Plunder: Private Equity's Plan to Pillage America

Another book on the evils of private equity will come out soon.  The description states:

"Plunder is a startling investigation into the poorly understood, powerful force of private equity that is reshaping the American economy: raising prices, reducing quality, cutting jobs, increasing inequality, and shifting resources from productive parts of the economy to unproductive ones. Already transformative, private equity is poised to reshape the American economy in this decade the way that big tech did in the last decade, and subprime lenders the decade before that. And importantly, private equity is doing all of this not just with the acquiescence but the active support of the government. If you've ever wondered what happened to Toys R Us; why your doctor's bills are getting more expensive, why nursing homes are getting worse, why there is a housing shortage, why newspapers in Chicago and Los Angeles have gone downhill and local investigative reporting has dried up, Brendan Ballou's Plunder provides the reason why and provides a reform agenda spelling out how this industry can be stopped from wreaking further havoc. Brendan Ballou shows how private equity firms buy up companies using little or no investment, forcing them to take on huge debts and pay extractive fees, often wringing the life blood out of them, leaving them bankrupt or a shell of their former selves. Private equity's impact extends to the communities that have long depended on now- eviscerated companies for employment and prosperity. Perhaps most startling is Ballou's insight into how this is happening with the active support of government. Through vivid storytelling, Ballou's revelatory explanation of how private equity works shines a light on a part of Wall Street that is hastening the financialization of the American economy and increasing the power of banks and other institutions over companies that make and sell tangible products"--

PEUReport has blogged about the evils of private equity underwrites (PEU) since summer 2007.  More recently I have closed many posts with "Politicians Red and Blue love PEU and increasingly, more are one."

I'm afraid the greed and leverage boys have already reshaped the American economy given their ubiquitious nature.  Their lust for money and power has reduced management to bullying for outcomes.  

For over a decade PEU founders have been identified as "policy making billionaires" and they get their way on laws, regulations and tax policy no matter how contrary to widespread public opinion. 

The plunder is in if the people's representatives are more loyal to the PEU boys than to the citizenry.  How long can it keep going?

Update 4-26-23:  Preying on the Dying: Private Equity Gets Rich in Hospice Care

Update 6-2-23:   The American Prospect ran a piece called "Days of Plunder."

Two new books call ‘private equity’ what it actually is, but neither offers much hope for emancipation from our eternal hostile takeover.

I suggest the piece be renamed "Decades of Plunder" enabled by both Red and Blue political teams.

Klain Back at O'Melveny, to Advise PEUs

Former White House Chief of Staff Ron Klain landed back at his former law firm.  O'Melveny announced in a press release last week:

...after the latest phase of his very impressive government career, we are thrilled to welcome him home...

Klain now brings his unmatched advisory, legal, and leadership experience back to O’Melveny, where he will head the firm’s Strategic Counseling and Crisis Management Practice. In that role, he will advise C-suite executives and boards of directors across industries—including technology, healthcare, infrastructure, transportation, private equity, and finance—on their most pressing legal and business concerns at a time of ever-increasing geopolitical and reputational risk. 

Klain co-founder private equity underwriter (PEU) Revolution LLC and was President of Case Holdings.  He served as an advisor to Skoll Global Threats Fund. part of Jeff Skoll's financial empire.

He will be working hard to please those PEU CEOs and board members.

...we commit to making your O’Melveny experience as satisfying as the outcomes we help you achieve. Our greatest accomplishment is ensuring that you never have to choose between premier lawyering and exceptional service. So, tell us. What do you want to achieve?

The greed and leverage boys want more power and lots more money.  How will Ron Klain help his brethren achieve those satisfying outcomes?

Sinema's PEU "Thank You" Donations

Sludge reported on Purple Team Senator Kyrsten Sinema's fundraising haul from private equity underwriters (PEU):

Executives and employees with the private equity firm The Carlyle Group donated $253,600 to Sinema in the first quarter of the year, while people affiliated with Blackstone gave her $274,500 and those affiliated with Kohlberg Kravis Roberts (KKR) gave her $103,700. The donations from employees and executives of those three investment firms made up more than 45% of the total money the senator’s joint fundraising committee raised in the first quarter. Other investment firms whose executives gave to Sen. Sinema in the first quarter of the year include Bain Capital, Tenaya Capital, and GreenWood Investors. 

Last summer Sinema single-handedly saved the greed and leverage boys from elimination of their preferred "carried interest" taxation.

Politicians Red and Blue love PEU and increasingly, more are one.  Should the Senator not seek another term she'd make a great PEU. 

Update 12-26-24:  As Kysten Sinema nears her Senate retirement, she is spending lavishly.  That skill should come in handy in her future PEU employment.

Update 1-11-26:  Former Senator Kyrsten Sinema  co-founded the AI Infrastructure Coalition, which pushes AI data center development.

Dominion Voting Machines PEU Owner Rings Register

Staple Street Capital purchased 76% of Dominion Voting Machines in 2018 and is the big winner of the Fox News "repeatedly lying on air about election fraud" legal settlement.

Malice produced the $787.5 million settlement, lottery level winnings for Dominion's private equity underwriter (PEU) owners.  

Fox did the normal settlement where they admit they did nothing wrong.  However, had they done nothing wrong Fox News would not have needed to write a huge check in to keep its "opinion stars" and CEO off the stand.  

The world missed what would have been a great spectacle showing the behind the scenes world of politics, money and power, Red political team version.   

The Red Team's extreme dysfunction has been buried under a pile of green, leaving the general public to go about their daily business.

The settlement also shows that one can turn over a rock and more often than not, find a private equity affiliate.  A voting machine company controlled by a PEU that wants to keep its preferred "carried interest" taxation.  What could happen there?  

Actually there is no need to cheat as politicians Red and Blue love PEU and increasingly, more are one.