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The Politics Of Private Equity Funds

I suppose I shouldn't have been surprised when "Cranking up the money machine" (News & Insights, Feb. 12) mentioned several large private equity fund entrepreneurs among leading investors in Hillary Clinton's and Barack Obama's race for President of the U.S. After all, these guys are the experts at taking large public entities private.

In fact, Bain Capital co-founder Mitt Romney has a chance at actually being America's first private equity President, following Bush's successful reign as America's first MBA President. Perhaps we're seeing the next really big opportunity for smart global money, moving from private equity funds to private sovereignty funds.

Alan H. MacDonald

Sanford, Me.

"My year at Wal-Mart" (People, Feb. 12) was interesting but highlights Julie Roehm's shortcomings.

Ms. Roehm should have realized that change is evolutionary, not revolutionary. As one Wal-Mart Stores Inc. (WMT) insider reported, "when Julie walked into a room it was always about her, nobody else." Frankly, her ego got the best of her. Instead of hitting the ground running, she should have taken the time to understand the best way to implement change and build allies within the company.

That Roehm has not yet landed another executive position may be indicative of the fact that her time in the spotlight is over. Next time, she should spend more time on techniques that will make her a successful manager.

Richard Meyer

Simi Valley, Calif.

There's only one way to change Wal-Mart Stores: Open up new stores under a different brand name. You might want to call it, um, Target.

Ken Leebow

Marietta, Ga.

It's astonishing that Roehm would think visiting so many ad agencies that wanted the Wal-Mart business would be a productive use of her time, especially as she had to miss the politically important Friday morning meetings to do so. Sounds like she really just didn't want to be there.

Jeff Gutenburg

Geneseo, N.Y.

"Green homes: The price still isn't right" (Environment, Feb. 12) states that "new federal and state subsidies could cut the cost of solar panels in half." Of course, if federal or state subsidies could do such a thing, we should subsidize virtually everything. Better yet, why not make them free?

Rather, what these subsidies actually do is distort markets for private goods by shifting the payment for the goods from the buyer to the taxpayer. If consumers experience a few more consecutive years of more than 10% increases in electricity rates (a good bet if plug-in electric cars are successfully marketed to the public), solar panels will not require a subsidy to be sold. Instead, consumers will be clamoring for them, and investment capital will flow where it belongs in order to supply them.

The alternative is a gradually increasing federal tax on electricity consumption, with funds used to eliminate other pernicious, regressive taxes. This would give consumers an incentive to invest now in solar panels with the knowledge that they will become more valuable as time goes on.

Jonathan Hains

Brookside, N.J.

I was the patient mentioned in "Stem-cell refugees" (Global Business, Feb. 12) who saw University of California at Los Angeles neurologist Dr. Susan Perlman immediately before and after my Chinese stem-cell treatments.

The article reported that "there were modest but medically significant results, but they wore off."

One immediate improvement was a return of feeling in one foot, but that disappeared while still in China, which I dutifully reported to Dr. Perlman. She gave me a battery of tests, most of which showed improvement. "Transient" was how she described only my brief foot improvement. I continue to show improvement in walking and function three months later, and fully intend to return to China in the future for additional treatments. I see it as the only game in town. My country is long on analysis, but short on hope.

Kim Poor


The major problem faced by carriers entering the TV market is how to assess the role of broadcast channels ("Lightspeed's slow start," InfoTech, Feb. 12).

The infrastructure needed to support broadcast IPTV (Internet-protocol television) is different from that used to support the other approaches. TV delivery becomes more of a traditional Internet application as it moves toward store-for-play. If viewers are moving to more personalized video experiences, then is spending money to deliver broadcast over IP a good idea?

Tom Nolle

Voorhees, N.J.

I read with interest Richard Dunham's roundup of advice for CEOs called to testify before Congress, "Excuse me, Mr. Chairman..." (Up Front, Feb. 12).

Executives who plan to be interviewed by journalists would do well to heed Dunham's advice, as well.

Over the past 16 years, I have had the privilege of working with countless executives as they prepared for interviews, both friendly and otherwise. The old adage of not arguing with people who buy ink by the barrel still holds true. Nothing is ever gained by long-windedness, contentiousness, or lack of preparation.

Alan Braverman

Pomona, N.Y.

In your article "Have REITs lost their footing?" (Personal Finance, Jan. 29), the author claimed REITs have become more volatile and more correlated with other stocks. Actually, REITs have become steadily less volatile over the past 16 years as measured by the standard deviation of monthly price returns. Even using the author's measure??ow often a REIT stock moved by 1% or more in a day??olatility has shown a steady 29% decline from late 1998 through the end of 2006.

The correlation between REIT returns and those of the Standard & Poor's 500-stock index also has declined over the last 16 years. Academic studies attribute the decline to an influx of institutional investment.

Brad Case


Research & Industry Information

National Association of Real Estate

Investment Trusts

Washington, D.C.

Editor's note: As the story makes clear, we were focused on a shorter time period over which the volatility and correlations went up.

We at Bombardier Flexjet, having just closed a profitable year, were shocked to read "One jet, 16 owners, big problems" (News & Insights, Jan. 29) stating that Flexjet has "severe growing pains" and has, along with competitors, "lost hundreds of millions." That is far from true, as BusinessWeek would have learned had Flexjet been sought for comment. In fact, none of the other problems mentioned were true of Flexjet. Our outstanding performance is testament to the viability of the fractional jet ownership model and diligence of Flexjet employees, whose efforts have resulted in our singular success.

Sylvain Levesque

Bombardier Flexjet


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