Well, Percy Walker has taken his marbles and gone home. We citizens of the blogosphere are the poorer for it. (Approximately $10.4 billion poorer, if you take Ol' Perce at his word.)This is a bad thing, in my opinion. Percy was "the world's foremost authority on the proper tax treatment of carried interest," in his own words, and it is always a great loss to the public weal when the leading theorist on a contentious social issue is forced to leave the field due to a few overzealous Spitzer wannabes. I would much rather have watched Percy and Vic "Carrot Top" Fleischer continue to mud wrestle over the issue and bite the occasional chunk out of each other's ear lobe. Everybody loves a good fight.
I suppose it is a sign of the maturation of the issue of private equity taxation that things have taken such a turn. Realizing that the private equity industry has no more than three actual friends on Capitol Hill (out of a total of 54 lobbyists and six dogs), Carlyle's David Rubenstein has dropped his previous strategy of wrapping Henry Kravis in the American Flag and wearing a lapel pin made out of apple pie in favor of pointing out that any tax targeted at carried interest will gore a great number of oxen that have no relationship to picayune plutocrats with Rod Stewart fetishes; namely, oil and gas and real estate. And everyone knows that we can't even look sideways at Real Estate nowadays without having the poor wretch burst into tears.
Vigorous theoretical defenses of the indefensible and scathing ad hominem attacks on your enemies simply no longer cut it in this Brave New Corporatized World of private equity. Christ, Rubenstein talked so much about "global brands" at the Deal M&A conference this week he began to sound like a Procter & Gamble ad manager. Plain speaking pioneers like Percy Walker are being frogmarched into retirement by weasely image consultants and PR specialists who are less interested in the truth than in soaking the previously principled PE firms for all they are worth.
Not that I agreed with Percy, mind you. I have no prouder trophy than Percy's blog post anointing me as one of his "Private Equity Haters." (You wouldn't believe how expensive and dangerous it is to bronze an entire computer while it is logged onto the internet, but I did it.) A great man is largely defined by the power and influence of his enemies. By that token, I am officially a Bad Ass.
Anyway, wipe away a tear for the passing of a great man. And pay absolutely no attention to those scurrilous rumors that Percy has eloped with sardonic memoirist Equity Private of PE fan site Going Private. While it is true that She Who Must Be Obeyed has been missing in action for over a month, I know for a fact that there is no truth to the rumor that she has been personally preparing a leafy love nest on a deserted Tahitian island in advance of Percy's arrival. Like all good private equity professionals, she outsourced it.
© 2007 The Epicurean Dealmaker. All rights reserved.
