Buyout big wigs, still conferencing

November 14, 2008

You would think that given the condition of the credit markets, and given the stifling of the private equity market, and given that private equity’s leveraged loans are partly to blame for the credit crisis…you would think maybe that some of the private equity big shots that stole the headlines during the credit bubble would recede a bit from the limelight. Hey, we had our day, things are bad right now, maybe it’s time to hunker down a bit.

Well, if you thought that was the case, you would be wrong. The keynote speaker at the Asian Venture Capital Journal’s private equity conference in Hong Kong was none other than David Bonderman, the colorful co-founder of TPG Capital who prefers wearing mis-matching socks. TPG suffered a big blow when Washington Mutual was taken over by the government, losing $1.3 billion in cash from that investment alone. Their Asian portfolio of financial investments has also been getting roughed up lately. But the negative press clearly hasn’t driven him away from the speaking circuit.

Bonderman was on stage at the JW Marriot conference room on Thursday, still able to pack a room, with rows of people stacked two deep around the edges and every table full and then some. Though he seemed a bit tired and at first short of breath, Bonderman was just as funny and insightful as he’s been in previous conferences, but this time with a darker tone. Indeed, where once he was praising big buyout firms and their ability to generate outsize returns, he is now explaining to crowds what the heck happened, and how we got here.

David Rubenstein, Carlyle Group’s co-founder, also spoke in Hong Kong on Thursday. And again, one would think that he may tire a bit of the public appearances, particularly now that the Golden Age is behind us. Carlyle hasn’t suffered a loss of Washington Mutual proportions, but it’s had some dust ups, including affiliate Carlyle Capital Corp. affiliate going bankrupt earlier this year. Yet Rubenstein hasn’t lost a step, and he’s still preaching the private equity gospel, with a different message this time. He too, however, spent time trying to explain what happened.

George Roberts, yes THE George Roberts as in Kohlberg Kravis & Roberts, spoke at the AVCJ event too.

Perhaps, when you are billionaires, economic climates like this one don’t take such a toll on one’s energy, or ego.

Here are some quotes from Bonderman, Rubenstein, and some other speakers at the AVCJ event. Here are some other quotes from the event.

Bonderman: “It’s a beautiful day in Hong Kong. The sun is shining, the sky is clear, the temperature is perfect. So let’s move right on to clinical depression in talking about the economy.”

“One of the best investments we ever made was not to invest in auto makers or parts suppliers or anything to do with either.”

“Private equity all has long term lock ups. So you may like our performance, you may not like our performance, but (makes a smooching, kissy sound here) you’re my partner for the next 12 years. At a hedge fund, you’re my partner for the next 45 days until you can give me notice and get the
hell out. So you have a situation where a trillion dollars have come out of hedge funds, which is a third of all the capital they had, and virtually no money coming out of private equity.”

“It’s all George W. Bush’s fault.” Joking, we think, about the financial turmoil.

David Rubenstein: “”Not even Abraham Lincoln would have helped.” Referring to the economy’s impact on John McCain’s U.S. presidential campaign.

“Investment banks, not sure, does anyone remember what one is? These used to exist in the United States. Now they’re gone. They, now the commercial banks, are not going to be shells of
what they once were, but will not be the engines of investment growth they were at the beginning of decade.”
“I’ve been a registered Democrat for quite some time. I can’t say I voted for my economic interests. But it’s an inspiring story. All of us here, who got to where we are by working hard, how could you not be inspired by that?” On voting for President elect Barack Obama.

Jamie Paton, Candover: “I sometimes wonder if I should have stayed in Australia surfing.” Joking, we can only assume, on launching a new private equity group in Hong Kong in the current climate.

Ralph Parks, Oaktree Capital: “I’m still trying to get the image out of my head of blood boiling at the bottom of a wok.” On a panelists mention of the term “blood on the streets” and his repeated comparison of the economic climate following a “wok” trajectory.

Photos: Top, George Roberts. Bottom, David Rubenstein. Reuters

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