The Carlyle Group took Private
Equity International's No. 3 spot on its annual list of the
largest P.E. firms in 2009 with $47.73 billion of capital raised
since 2004. The firm is still 50 percent owned by three of
its original founding partners, Dan D'Aniello, William Conway and
Greg Rosenbaum. Two other entities factor into the firm's
ownership-CalPERS, or the California Public Employees Retirement
System, has a 5.5 percent holding purchased in 2001, and Mubadala
Development, an investment vehicle for Abu Dhabi, has owned 7.5
percent of the company since 2007.
The Carlyle Group has 64 funds across its four major investment
disciplines: buyouts, venture and growth capital, real estate, and
leveraged finance. The firm's global reach would impress even
the most well-seasoned travelers-Carlyle has more than 30 offices
in North America, Europe, Asia, Australia, the Middle East and
North Africa, and Latin America. Carlyle operates across a
wide diversity of industries including aerospace and defense,
automotive and transportation, consumer and retail, energy and
power, financial services, health care, industrial, infrastructure,
real estate, technology and business services and
telecommunications and media. This massive private equity
company's portfolio history includes investments in at least 600
different companies. A few notable names include Dunkin'
Brands, the owner of Dunkin' Donuts and Baskin-Robbins, Japanese
wireless company Willcom, the oral hygiene company Water Pik, and
the Hertz Corporation.
This Washington D.C.-based private equity company has connections
in high places. With a high profile roster of former
employees and affiliates that includes former President George H.W.
Bush, former Secretary of State James Baker III, former British
Prime Minister John Major and international financier George Soros,
the Carlyle Group has earned a reputation for being a virtual who's
who of Washington. Wherever politics goes, controversy
usually follows, and The Carlyle Group has suffered its fair share
of bad press over the past few years. Because of the firm's
investment in the defense industry and the ties to George H.W.
Bush, many conspiracists have accused George H. W. Bush of having a
hidden agenda for the War on Terror-making the Carlyle Group
rich. The Carlyle Group has shrugged off this criticism as
off-balance, especially since only 7 percent of its total portfolio
is invested in defense.
Carlyle around the
The Carlyle Group's investments are broken up geographically as
follows: 60 percent in North America, 26 percent Europe and 14
percent in Asia. There is evidence, however, that the firm's
future includes a larger presence in the Asia Pacific region.
In a July 2008 press release, Carlyle announced that it would be
expanding its Asian Leveraged Finance Group, based out of Sydney,
Hong Kong and Tokyo. The leveraged finance group in Asia
manages approximately $14 billion in 24 funds. The firm also
made an $87 million investment in Sinorgchem Group, a chemical
company in China which produces rubber products, in July
2008. The Carlyle Group invested for the first time in Turkey
in 2008, acquiring a 50 percent stake in TVK Shipyard, a
shipbuilding specializing in chemical tankers. Details of the
deal were undisclosed.
Taking the challenges
The Carlyle Group waded through the uncertainty of the economic
crisis that took its toll on several of its portfolio businesses
and endeavors in 2008. One significant downturn was the
closure of its affiliate Carlyle Capital Corporation, after it
failed to meet agreements with lenders in March 2008. Carlyle
Blue Wave, the hedge fund venture of the company, was also
liquidated and shut down in July 2008. Several portfolio
companies also filed bankruptcy protection such as Edscha, SemGroup
and Hawaiian Telcom. By the last quarter of 2008, the company
trimmed its workforce to as much as 10 percent firmwide and closed
its Menlo Park office. Yet despite these losses, Carlyle
still managed to hold onto, and even increase, its private equity
fund to as much as $19.9 billion in new capital deploy. While
trying to avoid big deals that competitors are making, the company
managed to increase deploying capital in choice buyout, growth
capital, real estate and leveraged finance opportunities.