It must be a measure of the times that a firm that regards itself with such favor would deign to even consider participating in something so base as a government recovery program, much less discuss it on the record. Or perhaps Mr. Kravis is just a lot more loose-lipped than he used to be. That's saying something.
Still, it is hard to blame KKR for wanting to play. Accepting free money handed out without thought to risk or reward by dimmer bulbs is, after a certain sense, what private equity is all about. Kravis argues the point (unconvincingly).
KKR could take advantage of the infrastructure stimulus plan but is less interested in buying banks or their troubled assets, co-founders Henry Kravis and George Roberts have told the Financial Times."I think there may be some programmes where it will be appropriate for us to partner with the government," Mr Kravis said. "I think one area in particular that I think is a very big need and where we will have opportunities to participate is in infrastructure."
The Obama administration has committed hundreds of billions of dollars to infrastructure spending as part of its plan, ranging from road and bridge construction to investments in broadband and "green" energy.
Mr Kravis said the firm was looking at the public-private investment partnership and other initiatives. But the partners expressed caution about an overly opportunistic approach.
"Simply buying a pool of assets [through] a highly levered vehicle because a government is willing to give you more leverage than the markets and just sitting there and running off the assets and giving the money back to your partners is not what we do," Mr Roberts said.
Of course this is totally ridiculous. This is exactly what private equity firms do and if the government had been offering buyout artists even a tenth of a percent lower rates than the leveraged finance groups that multiplied like rabbits over the last fifteen years the Treasury would now labor under a balance sheet bloated with large swaths of now-private businesses in or approaching default.
KKR sets out stall for role in stimulus package [The Financial Times]
Posted by miami , May 22, 2009 10:29AM
'This is exactly what private equity firms do'
Normally, but
'if the government had been offering buyout artists even a tenth of a percent lower rates...'
I disagree, KKR would never ever get involved with the Feds on the upside when the getting was good, c'mon EP!
Posted by guest , May 22, 2009 10:30AM
EP, your disdain for your former profession is disturbing... You're painting a pretty broad stroke with comments like that.
Posted by guest , May 22, 2009 10:38AM
Too long; didn't read.
Posted by guest , May 22, 2009 11:02AM
EP, your prior firm must have sucked and really had no idea what they were doing. Unfortunately, too many hacks like that are out there. However, most will be gone in 5 years....
Posted by ep , May 22, 2009 11:22AM
*yawn*
That all you got?
Posted by guest , May 22, 2009 11:36AM
Let's bask in the glow of HK's genius.. ."The bubble is not going to burst" - take that to the LPs.
http://www.nysun.com/business/heat-is-turned-up-for-private-equity-firms/52866/
"Private equity is here to stay. There will be some hiccups along the way, and the Golden Age won't last forever, but the bubble is not going to burst," Mr. Kravis, who was the keynote speaker at the opening lunch of the Committee of 100's 16th annual conference yesterday at the Waldorf Astoria Hotel, said.
As Mr. Kravis describes it, the rapid securitization of bank loans to a "vast array of buyers all over the world looking for yield" dilutes the impact from one deal going sour. American and European banks, meanwhile, are in the best shape they've been in for many years, according to Mr. Kravis. Also, the amount of leverage in deals has gone down over time.
Posted by guest , May 22, 2009 12:12PM
Doesn't EP have disdain for everyone and everything? It's her schtick.
Posted by guest , May 22, 2009 12:13PM
@7- i think that's kind of the db model in general, isn't it?
Posted by guest , May 22, 2009 12:15PM
LBO flim flam.
Posted by guest , May 22, 2009 12:27PM
On/off subject:
http://pacer.cadc.uscourts.gov/common/opinions/200905/06-5267-1181914.pdf
high-ho, bitches - you're screwed.
Posted by guest , May 22, 2009 12:46PM
anyone remember KKR financial?
Posted by guest , May 22, 2009 1:01PM
Just look at Capmark. KKR is going to take its medicine.