Pickens: Private equity growth ’amazing’

Famed corporate raider T. Boone Pickens is amazed at the growth of an industry he helped establish in the 1980s, he said at a conference today.

T. Boone Pickens, who gained notoriety in the 1980s as one of several “corporate raiders”, said today at a conference that he considers the growth of the private equity industry to be “amazing”.

Pickens made his comment during a press briefing at the Milken Institute Global Confernce in Los Angeles.

Pickens is the founder of BP Capital, an energy investment fund. The Texan is best known as the founder of Mesa Petroleum, which during the 1980s launched a series of high-yield-bond fueled “greenmail” corporate takeover attempts of companies such as Phillips Petroleum, Gulf Oil and Unocal. Although by the 1990s hostile takeover attempts had given way to “friendly” leveraged buyouts, the activities of Pickens and other investors, including Carl Icahn, helped establish leveraged buyouts as a permanent feature of the financial markets.

Asked what he thought of the explosive growth of the private equity market over the past 15 years, Pickens said, “It’s amazing to me.”

“There’s no question we have some of the best financial minds in the world,” Pickens said of the private equity industry. “I did not think LBOs and private equity would go as far as they have,” he added.

Pickens noted the increased presence of private equity firms in all corners of the capital markets. “We can all make money by dealing with each other,” he said. “You do an LBO and then you take it public.”

Pickens noted the private equity industry currently “employs a lot of people”, which is good for the economy, he said.

Most recently, Pickens has called for more investment in alternatives to petroleum, arguing that the world has entered a period of ever-depleting oil supplies. Of the current high price of oil, Pickens said he expected higher prices to eventually weaken demand for oil, although he thinks this “choking point” has not yet been reached. “You went through $50 [oil] and $60 like a hot knife through butter”, he said. “At some point price will kill demand.”