Four More To Play Nice
New York Attorney General Andrew Cuomo announced in Sept. 18 that four more private equity firms have pledged to his “Code of Conduct. Access Capital Partners, Falconhead Capital LLC, HM Capital Partners, and Levine Leichtman Capital Partners have pledged not to hire placement agents to help them raise money from public pensions and to abide by campaign contribution restrictions. The firms also agreed to pay more than $4.5 million combined to the New York State Common Retirement Fund, split as follows: Access Capital will pay $1.6 million, Falconhead $1.3 million, HM Capital $1.56 million, and Levine Leichtman Capital more than $200,000. The deal comes after Cuomo has already convinced Carlyle Group to pay $20 million and Riverstone Holdings to pay $30 million. In related news, Marcellus Taylor, a former partner at Aldus Equity Partners and a defendant in the pay-to-play scandal, bought United Investment Managers, a Chicago-based fund-of-funds firm that invests in emerging managers. The firm has more than $300 million under management courtesy of six public pensions. New York State Comptroller Thomas DiNapoli sued Aldus Equity for wrongful conduct including fraud, bribery, conspiracy and breach of contract, as previously reported in Buyouts.
Teamsters Take On KKR
The Teamsters on Sept. 16 released a letter from General Secretary-Treasurer C. Thomas Keegel penned to Kohlberg Kravis Roberts & Co. executives, castigating them for stripping too much value out of Dollar General, the chain store KKR plans to take public. Keegel complained in the letter about allegedly wasteful executive compensation perks, lack of disclosure on potential regulatory risks, and heavy debt burdens placed on the company exacerbated by fees. He also expressed concern over the corporate governance of the company. “Long-term investors including Teamsters pension funds need assurances that Dollar General will have a sustainable profitable business plan that does not involve using all of its cash to pay down its approximately $9 billion in obligations in large part due to KKR,” Keegel wrote. KKR officials acknowledged the letter and said they were reviewing it. They declined to comment further.