Dan Primack

The carried interest taxation debate is fast becoming as irrelevant as "The Decision." Only a few die-hards still believe that persuasive arguments could revive meaningful legislation, while the rest of us despair at Democratic spinelessness and Republican obstruction. But God bless 'em for trying. Today, the Kauffman Foundation's Paul Kedrosky and Harold Bradley penned a Bloomberg Op-Ed, arguing that the IRS should treat carried interest as ordinary income. Not as some sort of ordinary income/capital gains hybrid, but as the same tax that the rest of us pay (or at least those of us without active lobbies in DC). They included the following rebuttal to those who claim carried interest is comparable to homeowner equity:

Dow Jones today released second-half fundraising numbers, showing that PE fundraising fell 26% over the same period from last year. Venture capital fundraising, on the other hand, rose 13 percent. View the press release after the jump...

My weekly video spot for Reuters was about this morning's scoop that Citi has agreed to sell more than $900 million worth of private equity assets to Lexington Partners. Per usual, I'm taping just a few paces away from the home office: Get more peHUB videos

Ryan Sprott and Paul Maxwell are brothers-in-law who first met twenty years ago in their native Kansas City. Now, they are giving up their East Coast private equity jobs in order to launch a new firm back home. It's called Great Range Capital, and will focus on Midwestern, lower middle-market companies. Typical equity checks will be between $10 million and $30 million, and the sector strategy is mostly agnostic (save for an aversion to financial services and oil & gas).

Citigroup has agreed to sell a portfolio of private equity interests for more than $900 million, according to multiple sources. Lexington Partners is the buyer, while StepStone Group will provide management services. This is a big deal – one of the largest secondary transactions ever and a further move by Citi away from private equity. So let’s break it down: What’s being sold? The deal includes Citi’s stakes in bank-branded funds-of-funds, mezzanine and co-investment vehicles. Basically what used to be known as Citigroup Private Equity, and managed by John Barber (he left earlier this year).

Elevation Partners was originally known for its high-profile partners, including Roger McNamee, Fred Anderson and Bono. But it quickly became better known as the firm that kept plugging money into Palm, the PDA maker whose popularity seemed to have peaked in around 2001. "As goes Palm as goes Elevation," summed up an investor in the firm's $1.8 billion debut fund. Last week, HP completed its $1.2 billion acquisition of Palm, which gave around a 5% cash-on-cash return from its $460 million in total investments. Not very good, but better than Elevation would have faired in the Palm bankruptcy that some predicted. To get a better sense of the Palm situation from Elevation's point of view, I spent some time on the phone with Fred Anderson, the ex-Apple CFO who repped Elevation on the Palm board of directors. The conversation actually took place back when the deal was first announced in April, but Palm lawyers prevented me from publishing it until now. What follows are some of his comments from our conversation:

The European Venture Capital Association this morning sent over new data on Central and Eastern European investment and fundraising for 2009 (both VC and PE). Download the release here.

Henry Kravis and George Roberts each made over $70 million in 2009, according to a new filing with the SEC. Almost all of that was in the form of stock awards, with their actual salaries coming in at $250,000 each. Also included is the use of a chauffeured car, on which Kravis spent $99,000 and Roberts spent around $144,000. For context, Blackstone Group boss Steven Schwarzman's 2009 salary was $350,000. His total 2009 compensation was over $7.8 billion -- almost all of which was stock awards. Leon Black of Apollo Group, on the other hand, had a 2009 salary of $100,000 and total compensation of around $787,000. In terms of fees and carried interest compensation, KKR reports:

I’m told that The Blackstone Group is still on schedule to close its latest mega-fund tomorrow, after around two years in market. No word yet on where it will end up, although we reported last month that the revised target was just north of $12 billion. It originally went out with a $20 billion target, […]

Law firm Proskauer Rose this morning sent out a client alert about new reporting requirements for private equity and hedge funds (VC funds are excluded). Read it here.