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Breakingviews: Carlyle’s investment hell

Friday, Apr 04, 2014 - 03:46

April 4 - Richard Beales and Jeffrey Goldfarb discuss the buyout firm’s sticky problem with a small Montana water utility and what it says about public-private infrastructure investments.

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-- agree that a big private equity firm has found a little bit of investment hell for itself. In Montana. Jeff he's a big boys normally we wouldn't -- much -- this one seems seems like. A little little aggressive what's happening. Together really stepped into something truly bizarre mental and I bought this water utility as part of bigger group a few years ago -- please -- Missoula Montana small town about 70000 people. Used to be known as hell gate ironically enough for it and Alvin and the mayor has decided to -- back to this deal but despite a lot of controversy account at the time it. Has turned around and decided actually this city should really on the utility. Has gone to Carlos several times offered by it they've said. Thanks but no thanks -- job and now he's using eminent domain which is a really powerful. Force of law right to try and it's basically seize the assets from Karl. -- -- -- Actually three you sort of parent and three utilities is just one of them. I guess that saying the price which I think because of fifty million dollars. Isn't high enough as though they wouldn't consider selling if it was right so so -- ensuring that happen in this situation was that one of the reasons mayor backed it was because -- actually did put in place. A path for considered by the city has wanted to own these children are very long time. Has tried on multiple. Occasions to get it back. -- other -- they don't own it now. Is because they tried to seize it from the previous owner back in 1984. And the court struck that -- state supreme called but it. Owner was when he came time to self -- seven you're going to elect a peninsula that city right try to grab it from assurances that Clinton and other private buyer. Now again Carlisle did lay out in its plans awaits it said when we're ready to sell it. Or we decide to carve up -- little -- will be -- city chance the -- and -- this little -- 2011 the same is now saying there together they didn't really just recently reelected is no real political. H for him to do this it's curious because he also at least in the run up to this. Had not really. Been critical of Carlyle in the way we've been running here but in the basic premise what. We're gonna grab it because really worth it only. Major news out of -- on -- water utility. And register with dozens and placate the greatest debacle got a court document that kind of lay out some things that latency Carlo raised rates they're not investing enough. For the truly matters because it's in private hands. It's over it's regulated by the state. Just a very curious case that there is this isn't the biggest. Deal have a right to our whole thing was under the old Palin to this level -- fifty million -- Offer his fifty whatever it's worth its it's was not huge but it is sort of it's it's a window on on I -- political -- -- -- program and bigger problem here really is is it investments in infrastructure which we've all been talking about for letters. You know the crumbling infrastructure not just the United States world. Roads bridges you know all sorts of utilities. The court this sort of emblematic of exactly why we can structure these public and private partnerships because you're at the -- Of these local politicians. That will go to extreme -- to try and dictate what's gonna happen in their town. Have a very hard to your private money it's sort of emblematic why Obama's infrastructure bank which also was meant to bring that money the final season -- really is that. A lot of these local places can get cheap money right it means when bonds. They're so they don't want to hand over that's the price. Target thanks Jeff will leave -- -- for breaking news this week we'll have more for you on Monday.

Breakingviews: Carlyle’s investment hell

Friday, Apr 04, 2014 - 03:46

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