Second Opinion

In question: The SEUI, Freddie, and Your Neighborhood I-Banker, and corporate boardrooms

Icahn Report: Carl Icahn is up to his old tricks again, this time criticizing Marty Lipton’s bemoaning of the Anheuser Busch takeover. Icahn writes, “His opinion suggests that it is a good thing that the maker of Budweiser should be protected from takeovers to maintain the cozy “status quo” of its boardroom.” Love him or hate him, he has an opinion, and one that supports the existence of the private equity industry.

SEUI: On the flip side, Andy Stern and the SEUI is at it again. We remember the union group’s mostly unsuccessful rally back in July. We remember their wholly unsuccessful attempt to bar California pensions from investing in private equity. Now they’re targeting Washington State.

The Wall Street Journal’s editorial page presented a scathing take on Stern and the SEIU’s underlying motivations.

I’m not sure all of the criticisms presented by the Journal are fair, though I have to overall agree that the SEUI is tainted by its ultimate goal—being made able to organize workers at PE portfolio companies. But I don’t think some tangential goals of the group are ill-conceived, and companies loaded with debt aren’t prepared to fulfill them. A livable wage? How dare they ask for such a thing! The irony lies in the Journal’s argument that if public pensions stop investing in private equity, “The losers would be union pensioners who depend on those returns for retirement income.” Makes sense, but they’re also (often) the losers scraping by with no health care or possibly the losers losing their jobs, who stand to make money from private equity firms, when they retire. It comes full circle.

Corporate Dealmaker: More proof that your best investment banking relationship may have moved over to the corporate world.

Dealbreaker: How to buy Freddie paper with Fed leverage.