I admire a firm like Kohlberg, Kravis, Roberts, but probably not in an entirely practical way. When I look at private equity firms, and to a greater extent, hedge funds, it's like watching Errol Flynn in Robin Hood, one of my favorite films. You know how it goes: a bunch of guys, loyal only to each other, hanging out in the forest making mayhem, stealing the hearts of adoring women and the money of others, eating huge turkey and pig legs staight off the roasting fire. KKR is kind of the financial version of male freedom. They use dollars and debt instead of bows and arrows to acomplish the task. It's a battle, with money and financial ingenuity as the weapons.
Private money firms are the last vestiges of activity (along with Islamic clericdom) that go largely untouched by the process of feminization. And while a good many things need that woman's touch, such soothing hands rather squeeze the world of all its vitality and spirit. The male sense of adventure and conquest gets reduced--especially in the corporate world-- to joining some team in charge of employee moral and other masturbatory fruitlessnesses.
(I recall my boss asking me to join a team in charge of "fun", a role I declined, but which ultimately resulted in some not quite tasty Mexican food brought upstairs from "Prison Chef", the guy who runs the company cafe and who seems inches and a day out of prison).
It's grand to see KKR tearing it up, and for so long, like a beast roaming the financial jungle, consuming as it wills, and daring other carnivores to snatch its meal.
There is, however, a moment where we must take a pause and set the turkey leg down to ask what is going on here in the forest and at Robin's table. While I enjoy seeing private businesses doing their thing well, I do not necessarily enjoy seeing massive companies taken private, then sucked to the bone and spit back out into the public market. I am not entirely keen on financial transactions for the sake of transactions.
When I look at KKR and it's $29 billion dollar bid for First Data revealed today, or its ongoing attempt to rope in Texas energy company TXU, I wonder what the ultimate goal is. Or maybe, what the secondary goal is because ultimately deals are done for money, and I understand that. But after that, is there some vision being applied in these acquistions that will make it all worthwhile for the employees and customers of these huge companies? It's always an eyebrow raiser when such firms begin to cash out of the companies by borrowing funds to pay out huge dividends, basically using the companies as pack horses or whores, loading them up with debt and junk before setting them free back into the markets, all spent and walking funny.
There ought to be a benefit all the way around. The companies should be made more efficient, stronger, healthier, more financially flexible, while also rewarding all investors and stake holders (which I limit to investors and employees, and extend to the community if the company is drawing benefits from that community in some fashion).
If it turns out that the KKR's of the world are merely enriching themselves at the expense of formerly public companies and their employees, it is only a matter of time before various governments around the world begin to pass laws prohibiting the free movement and activity of private money. That would be the true shame. Then all adventure would be gone from the world. No battles to be fought, nothing to be discovered and no fortunes to be had.
