Iran and Venezuela get into Private Equity
By blackhedd Posted in Breaking News — Comments (5) / Email this page » / Leave a comment »
According to our friends at AP, there is a formidable new force in global investing. Mahmoud Ahmadinejad and Hugo Chavez, two noted financial heavyweights who also have side-interests in national politics, have teamed up to manage a new $2 billion fund. While Dan McLaughlin gives his expert gloss nearby from the political point of view, I decided to examine the economics. Ladies and gentlemen, I honestly don't know whether to laugh or cry.
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Ahmadinejad is taking some time off his busy schedule as an in-demand public speaker and nuclear-physics enthusiast, for face-time with his buddy in Caracas. They've been talking about a fund for country-restricted investments, but today they announced that the scope of the fund would be widened and it would seek projects in "friendly" countries other than Iran and Venezuela.
"It will permit us to underpin investments ... above all in those countries whose governments are making efforts to liberate themselves from the (U.S.) imperialist yoke," Chavez said.
"This fund, my brother," the Venezuelan president said, referring affectionately to Ahmadinejad, "will become a mechanism for liberation."
Additionally, Chavez stated the new fund's investment goals with a succinct, four-word mission statement: Death to U.S. imperialism!
For additional reactions to the new "D2USI" fund, I contacted some clued-in private-equity players of my acquaintance. This being a Saturday, their comments were delivered at a slightly slower and more slurred pace than is customary, but they were all intrigued by the contrarian stance implied by the fund's mission statement. (The protracted bull-market in U.S. imperialism shows no signs of slowing.) However, all of them expressed concern about the small size of the fund. $2 billion isn't a lot of money to put into the ground these days, especially with an investment universe spanning more than two countries.
The experts also noted the paucity of specifics in Chavez' statement about the new fund's goals. There is no mention of whether the fund will participate in venture deals, mid-market PE, M&A, PIPEs, or indeed anything specific at all. The new fund did not make a PPM available. Our best information is that the limited partners of the new fund comprise the entire populations of the states of Venezuela and Iran.
There is no current information on the roster of investment professionals recruited by the new fund, or on the fees it will be charging. Assuming the standard 2-and-20 structure, we expect that the two fund principals, Ahmadinejad and Chavez, will each be taking home an annual management fee of $10 million ex-costs, together with carried interest.
Enough laughing. Now for a little crying. I would dearly love to short-sell any deal that this pair decide to take an interest in. But I have next to no hope that they will be issuing any borrowable securities.
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Iran and Venezuela get into Private Equity 5 Comments (0 topical, 5 editorial, 0 hidden) Post a comment »
"The protracted bull-market in U.S. imperialism shows no signs of slowing."
John McMullen once said there is nothing more limited than being a limited partner of George Steinbrenner. The limited partners here may do him one better.
"No compromise with the main purpose, no peace till victory, no pact with unrepentant wrong." - Winston Churchill
Or how about an ICBM?
Chavez and Ami will launch terrorist attacks against U.S. companies while they short their investments, etc.
The trouble that I see with this is that our MSM and the Leftist politicos with which they've made their bed will want to play Alcibiades to our "Athens" (*). They'll cuddle up to this pair simply on the basis that they actually share their perceptions of the United States and probably have some stake in seeing our country reduced to a state of submission (the goal of that communism which inspired most of their thinking). So long as they're with the winning side, they'll be happy to go along. That's why I don't think we'll see them betrayed by the enemies of the United States, because they're willing accomplices in the whole "useful idiot" brigade.
As for the parties of Iran and Venezuela themselves, I see this as more of their symbolic posturing. The real concern is what happens if Iran does churn out a nuclear bomb or three. Or five, or seven or whatever they want to make. And whatever Chavez decides to do when that happens. The crazy man is bad enough for his neighbors as he is; I don't want to see the crazy man have a (censored)load of nuclear, biolocial and chemical weapons on hand with which to "proactively" take out those neighbors who won't submit.
There's a local (and now nationally-televised) talk show host by the name of Glen Beck who keeps pointing to these two in Apocalyptic terms. So far, things seem to be stacking up in favor of his fears being well-founded.
(* For those who want to know, Alcibiades was the poltical leader in Athens during the height of the Pelopponesian War [c. 429 - 401 BC] who want over to the opposing Spartan alliance when elements of his home city turned against him, then turned towards the Persians [guess who?] when that deal didn't work out as he intended. He was said to have fallen under an assassin's blade towards the end of that war while living in exile in Thrace [the modern portion of Turkey in the southeastern portion of Europe] and entertaining his next move. We know how things turned out for Athens and Sparta.)
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