There's not just Wilbur Ross who will serve as Commerce Secretary, but also Blackstone (NYSE:BX) CEO Steve Schwarzman who will chair the President’s Strategic and Policy Forum, and attorney Jay Clayton - who has advised on numerous major P-E deals - to lead the SEC.
Aside from those official posts, the president-elect has met with the heads of Carlyle Group (NASDAQ:CG) and KKR since his election.
"There seems to be more interest in the advice of real-world practitioners than in the past,” says the head of the P-E industry's D.C. lobbying group. "This is encouraging."
Indeed. Among P-E's top priorities is carried interest - one of the few things Trump and Clinton agreed on during the campaign. Carried interest is currently taxed at 23.8% vs. the top ordinary income tax rate of 39.6%. Like Clinton, Trump wanted carried interest taxed as ordinary income, though Trump would lower the top rate to 33%. Other tax law changes Trump is proposing could cut the effective tax rate further - perhaps to as low as 25%, or just marginally higher than currently.
Another big priority is retaining the tax deductibility of interest. Trump wants to give companies the ability to either keep that deduction or pass and gain the ability to immediately expense capital investment. A plan by House Republicans might not be as favorable.
Equity for the deal came from Carlyle's (NASDAQ:CG) $2.4B Equity Opportunity Fund II. Terms were not disclosed.
From the PR: "Claritas is focused on consumer segmentation insights. It provides marketers with a comprehensive view into consumer behavior patterns through proprietary segmentation analysis powered by broad access to data sources."
Carlyle purchased Claritas in partnership with Indian Hill Group, which is comprised of Claritas CEO Mike Nazzaro and some of the former leadership team of Nielsen (NYSE:NLSN) Catalina Solutions.
Noting a valuation discount to peer Blackstone, and his expectation for a big rise in fee-paying AUM next year setting the stage for the next upcycle in distributable earnings, Citi's William Katz upgrades Carlyle Group (NASDAQ:CG) to Buy from Neutral.
McDonald's (NYSE:MCD) is looking to raise $1B-$2B with the sale of its China and Hong Kong stores after the U.S. fast-food chain decided to keep "a significant minority stake in the business," Reuters reports.
The company picked a consortium led by Carlyle Group (NASDAQ:CG) and Chinese conglomerate Citic Group to buy the outlets, but its decision lowered the price tag for the stores from an expected $3B.
Prominent public pension funds have turned their backs on hedge funds, and so have a few big insurance companies. Now, one of the world's biggest private equity firms, the Carlyle Group (NASDAQ:CG), is walking away, too.
"When our performance falls short, it is critical that we deal with the consequences," Carlyle co-founder Bill Conway Jr. said.
Investors took $28B out of the industry in Q3, according to Hedge Fund Research, marking the biggest quarterly outflow since the depths of the financial crisis.
Neptune Oil & Gas, the energy acquisition firm set up last year by Carlyle Group (NASDAQ:CG) and CVC Capital Partners, is in talks to buy French utility Engie’s (OTCPK:ENGIY) oil and gas business, Bloomberg reports.
The Engie assets, spanning the U.K., Norway, Algeria, Egypt, Germany and Asia, reportedly could fetch ~$4B.
Engie has said it plans to sell as much as €15B ($16.5B) in assets by 2018 and that it sought to reduce its exposure to oil and gas prices.
Hayward is seeking oil assets to buy in countries including Argentina and Colombia and has lined up a team of executives to run the business under Carlyle's ownership, according to the report.
If successful, Hayward reportedly would be paid a fee by Carlyle for introducing the deal to the firm, although it is not clear whether he would have an ongoing role in the management of the new venture.
Total (NYSE:TOT) has agreed to sell its specialty chemicals unit Atotech to Carlyle (NASDAQ:CG) for $3.2B as the French oil major disposes of non-core assets to weather a slump in crude and preserve payouts to shareholders.
Total is also working on the sale of some "mature" offshore oil fields in the North Sea and Africa this year, and plans to sell businesses in its Italian marketing and services division in 2017.
"For any professional investor, this is the most difficult period we’ve ever experienced,” says Joe Baratta, Blackstone's (NYSE:BX) global head of private equity. “You have historically high multiples of cash flows, low yields. I’ve never seen it in my career. It’s the most treacherous moment.”
For private-equity players, lofty valuations make it a great time to cash in on investments, but a not-so-great time to redeploy capital into new deals. Not finding a lot of value in large LBOs, Baratta says Blackstone is targeting smaller companies with lower leverage.