LOS ANGELES — The Milken Institute Global Conference happened to coincide with May 1, the day Occupy Wall Street picked to reinvigorate its ranks with a series of marches and protests across the country. Inside the financier-filled Beverly Hilton here, though, the Occupy movement seemed a world away.  As attendees filed into the hotel ballroom for a panel on private equity, in the background played capitalism-themed songs – “You Never Give Me Your Money” and “If I Had a Million Dollars” among them.  The private equity panel, one of the most anticipated events of the conference, brought together Apollo Management’s Leon D. Black, TPG Capital’s David Bonderman, Providence Equity Partners’ Jonathan Nelson, Leonard Green’s Jonathan Sokoloff and Thomas H. Lee Partners’ Scott Sperling to discuss the state of the buyout business.  The abbreviated version of the 90-minute panel: Europe is a mess, Asia is exciting, emerging markets can be dangerous, the Obama administration has created uncertainty around regulation and taxes, and even though the debt markets are wide open and companies are flush with cash, few big buyouts are likely to happen until after the presidential election.  “I would think, if Romney gets elected, there will be a boom in the markets,” Mr. Black said. “But right now, it’s a tossup. If Obama is elected, I think there’ll be a continuation of the regulatory and tax pressures. A lot of that cash on the sidelines is waiting to see what happens.”  Mr. Bonderman spoke about Europe, saying that the Continent is “going nowhere forever.”  Europe’s disarray would typically give private equity firms an opportunity to swoop in and pick up distressed assets, he said. But European regulators are not likely to force firms to sell assets, as American regulators did during the financial crisis. He added that TPG’s investment strategy was to “stay away from impossible governments and impossible tax regimes,” citing India as a difficult country in which to pull off big deals.  Most of the panel agreed that the appetite for huge, multibillion-dollar leveraged buyouts still had not recovered since the financial crisis.  “The largest deals are out,” Mr. Nelson said. “They’re off the table. But most firms have experienced a pretty steady flow in small-cap deals.”  “Three years ago was the time to back up the trucks,” Mr. Black added. “There are still some opportunities here, but it’s not like shooting fish in a barrel like it was three years ago.”  The discussion’s tone soured when talk turned to the Obama administration and the current state of regulation. Participants in the panel spoke about Dodd-Frank Act and the JOBS Act, characterizing both as generally misguided or poorly executed. And they expressed concern that America seemed to respect big business less than some other countries do.  “The difference in view outside the U.S. generally is so much different than in the U.S.,” Mr. Nelson said. Elsewhere in the world, he added, “we are welcomed. We hear, ‘How can we help you?’”  Of a recent business trip to Asia, Mr. Nelson said, “I actually feel respected when I’m making those visits.”  Mr. Sokoloff said that in a recently closed financing round, 40 percent of the money the firm raised was based outside the United States.  Absent from the panel were executives from Carlyle Group, the giant private equity firm that is said to be headed for an initial public offering. Asked whether he thought Carlyle’s choice to go public was a good thing, Mr. Black said, “I think it’s great. I think the more the merrier.”  Given the chance to make a few final remarks, Mr. Black, whose 60th birthday bash was covered by DealBook, echoed the sentiments of many at the conference.  “Isn’t capitalism great?” he asked.  DealBook will be bringing updates from conference sessions as warranted. (You can also follow the conference’s Twitter hashtag, #2012GC, for frequent updates from other conference attendees.)
The private equity titans discuss the lack of big buyouts and the perception of the industry in the United States and abroad. And one predicts boom years for the sector if Mitt Romney is elected.