FIRST ROUND(5)

As American GPs grapple with the prospect of tax hikes on carried interest, veteran venture capitalist Tom Perkins is experiencing his own, unique tax issues – exhibiting his mega-yacht in the US is likely to cost several million dollars in import taxes.

This looming liability has thrown overboard any plans the 75-year-old co-founder of Kleiner Perkins Caufield & Byers had of showing off the $130 million, 289-foot (87 metre) Maltese Falcon in the US, says David Kaplan, author of Mine's Bigger: Tom Perkins and the Making of the Greatest Sailing Machine Ever Built. The Maltese Falcon is indeed big. If it were to anchor in New York, Kaplan has estimated the sails would nearly reach the Statue of Liberty's tablet.

However, “several million dollars is a lot of money for the privilege of showing up in New York or San Francisco”, particularly considering the boat will spend the bulk of its time where the sailing is best, in the Caribbean and Mediterranean, Kaplan says.

Showing off the boat to friends, family and colleagues is meaningful not just because the Maltese Falcon is the world's largest sailboat and incorporates unique design and cutting-edge technology, but because it is a metaphor for Perkins' life, Kaplan says.

“Perkins regards the building of this yacht as the culmination of a career built on managing risk,” Kaplan says. “Here he was trying to build a sailboat that was different than any other sailboat that had ever existed: Somebody had theorized the concept of the DynaRig, someone had theorized the notion of automated rotating masts that had a limited amount of rigging. Nobody had ever attempted it.”

QUOTABLE
“We're where we are right now because of the unbelievable egos of guys running the private equity firms like Blackstone. They put big targets on their backs by what I consider stupid actions like throwing these big parties.”

Dixon Doll, incoming chair of the National Venture Capital Association, speaks his mind at the recent Red Herring East conference in Boston

“Mr. Schwarzman owns an airplane and Messrs. Schwarzman and Peterson jointly own a helicopter that we use for business purposes in the course of our operations. Messrs. Schwarzman and Peterson paid for the purchase of these aircraft themselves and bear all operating, personnel and maintenance costs associated with their operation. The hourly payments we made to Mr. Schwarzman and Mr. Peterson for such use were based on current market rates for chartering private aircraft. We paid $1,544,320, $1,037,925 and $1,032,170 to Mr. Schwarzman in 2006, 2005 and 2004, respectively, for the use of his airplane and we paid $158,500, $306,210 and $198,905 to Mr. Schwarzman and Mr. Peterson in 2006, 2005 and 2004, respectively, for the use of their jointly-owned helicopter.”

From the Blackstone IPO prospectus

“Banks' appetite for debt has fallen to nothing. Looking at them trying to deal with the debt they are already holding is like watching a python with an elephant clearing the way through its system.”

A partner at a UK private equity house finds an imaginative way of describing the hiatus in the debt markets to UK's Sunday Telegraph newspaper