Glenn Hutchins believes that the Troubled Asset Relief Program in the U.S. was one of the most successful emergency measures taken by the government to address the recent financial crisis. But don’t expect the Silver Lake Partners co-founder and co-CEO to join the Obama administration.
“TARP very clearly stabilized the financing sector,” said Hutchins, who was speaking Tuesday at the Quebec City conference.
While he holds TARP in high regard, Hutchins, co-founder of Silver Lake, said he knows that the program is wildly unpopular in the U.S. He also noted, during a Q&A session, that a survey found that torture is more popular than TARP. “One of the most powerful tools is the most unpopular,” he said.
Hutchins also had high praise for the Federal Reserve, which he said took the most creative action to address the financial crisis. “The Fed really rode to the rescue,” he said.
In the 1990s, Hutchins served in the early Clinton Administration as special advisor on economic and healthcare policy. On Tuesday, he was asked about joining the White House as one of the “businessmen” Obama needs in his administration. “I’m not interested in a demotion,” Hutchins said.
Hutchins, however, was not as forthcoming in discussing the large dividends that some PE-backed companies are taking. On Monday, Dunkin’ Brands said it was raising about $2 billion– via a $1.35 billion loan and $625 million in notes—to pay its shareholders, which include Bain Capital, the Carlyle Group and THL Partners. Getty Images, which is owned by Hellman & Friedman, is also in the market for a $1.27 billion loan to partly fund a special dividend of $495 million to its shareholders, according to Thomson Reuters Loan Pricing Corp.
I asked Hutchins what he thought about companies paying large dividends to their PE shareholder and whether Silver Lake would be joining the payout parade. Hutchins declined to comment on what Silver Lake will or won’t do. He also said that “it’s impossible to make a judgment” on companies taking dividends. “You have to judge it on a case by case basis,” he told me later on the sidelines of the Quebec City conference.
Hutchins, continuing on the sidelines, wouldn’t comment on the Seagate buyout talks (which reportedly failed) or on whether he thinks the Celtics will win tonight.
Lastly, I asked Hutchins about whether he thought the credit markets had rebounded enough for there to be a $10 billion deal. Some PE execs, like Blackstone’s Tony James, have forecast that a $10 billion deal is now possible. Hutchins told me that we’re looking through the wrong end of the telescope. It’s similar to how parents often ask him how to get a child into Harvard (its Hutchins’s alma mater). The question should be how to raise a child that Harvard would want, Hutchins said.
“My focus is on the quality of the business,” he said. “It’s on the size and the financing and the means to acquire something great. I’m not thinking about the $10 billion deal.”