Carlyle Group

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The Carlyle Group
Type Private Partnership
Founded 1987
Headquarters Washington, D.C.
Key people Louis V. Gerstner, Jr., Chairman
William E. Conway, Jr., Founder
Daniel A. D'Aniello, Founder
David M. Rubenstein, Founder
John F. Harris, CFO
Industry Financial Services
Products Management buyouts
Real estate
Leveraged finance
Venture and growth capital
Revenue Undisclosed to public
Employees 750
Slogan N/A
Website www.carlyle.com

The Carlyle Group is a Washington, D.C. based global private equity investment firm with more than $75.6 billion of equity capital under management.[1] The firm operates four fund families, focusing on leveraged buyouts, venture & growth capital, real estate and leveraged finance investments. The firm employs more than 515 investment professionals in 21 countries with several offices in North America, South America, Europe, Asia and Australia; its portfolio companies employ more than 286,000 people worldwide. Carlyle has over 1100 investors in 61 countries.

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Carlyle was founded in 1987 by William E. Conway, Jr., Daniel A. D'Aniello, Stephen L. Norris, Greg A. Rosenbaum, and David M. Rubenstein[2]. Rosenbaum left in 1987[3]; Norris left in 1995[4]. The three remaining founders are reported to collectively own around a 50% interest in the group's general partnership. The California Public Employees Retirement System (or CalPERS) is the only institution which owns a stake in the partnership, holding 5.5% of Carlyle.

As they wanted the firm to outlive them, the founders named the firm after the upper east side hotel in New York City, the Carlyle Hotel, where they first met to discuss the idea. Carlyle's current chairman is Lou Gerstner, former chairman and CEO of IBM and Nabisco.

Carlyle deals in the following industries: Aerospace & Defense, Automotive, Consumer & Retail, Energy & Power, Healthcare, Real Estate, Technology & Business Services, Telecommunications & Media, and Transportation. The Carlyle Group's investments are focused on East Asia, Europe and North America, with most investment money coming from the United States (65%), Europe (25%), Asia (6%), Latin America, and the Middle East. Defense investments represent about 1% of the group's current portfolio[citation needed]|}} — though this translates, for example, into a 33.8% ownership of QinetiQ, the UK's recently privatized defence company.

Though known for its expertise in aerospace and defense, Carlyle invested more than thirty percent of its assets in the telecommunications and media sector. Noted portfolio companies are Dex Media, the former directories business of Qwest Communications; Willcom, a Japanese wireless company; Casema, a Dutch cable company; and Insight Communications, the ninth largest cable company in the U.S. The Carlyle Group is also a major investor in US Investigations Services, which is the privatized arm of the United States Office of Personnel Management's Office of Federal Investigations.

Brand-name companies that Carlyle owns include: Dunkin' Brands, which owns Dunkin' Donuts and Baskin-Robbins, and dental hygiene company Water Pik. Carlyle also recently took rental car company Hertz public.

On January 29, 2007, Carlyle announced that it would acquire Synagro Technologies, Inc, which according to Synagro's website is "the largest recycler of biosolids and other organic residuals in the United States". The total enterprise value of the transaction, including the assumption of debt, is $772 million.[5]

On June 28, 2007, Carlyle announced that it would partner with Onex Corporation to buy the Allison Transmission unit from General Motors for $5.6 billion.[6]

On July 2, 2007, it was disclosed that the Carlyle Group was looking to buy Virgin Media UK cable business.[7] Richard Branson is the largest shareholder, and the Virgin Group own the name Virgin, and Virgin Media have the rights to use the name Virgin for 10 years[citation needed]|}}.

On July 28, 2007, Carlyle announced the acquisition of Applus from its shareholders Agbar, Union Fenosa and Caja Madrid for an enterprise value of €1,480 million.[8]

Caryle acquired United Defense Industries in October 1997, bringing in over 60% of Carlyle's defense business. United Defense went public on the New York Stock Exchange in December 2001 with Carlyle retaining a stock ownership position. Caryle completed the sale of all of its United Defense stock and exited the investment in April 2004[9]--in private equity terms, the investment was "realized" at that time.[10] (One major United Defense program was the XM2001 Crusader self-propelled howitzer which was canceled by Secretary of Defense Donald Rumsfeld in early 2002 causing United Defense stock prices to fall 27 percent.[11])

 This article or section may contain original research or unverified claims.
Please improve the article by adding references. See the talk page for details. (September 2007)

Critics of the Carlyle Group frequently note its connections to various political figures. Some of the sectors and companies in which it invests are highly sensitive to political activity; indeed, its actions may be viewed as a form of political arbitrage. This may create conflicts of interest when political decision makers have their own personal wealth [4] linked to such investments. Carlyle is the largest private equity firm located in Washington, D.C. - its corporate headquarters are located on Pennsylvania Avenue. Some have also linked Carlyle to some of lesser-known companies that have been linked to US Intelligence, such as Centre Analytics and In-Q-Tel.

In the book House of Bush, House of Saud, author Craig Unger states that Saudi Arabian interests have given $1.4 billion to firms connected to the Bush family. Nearly 85% of the $1.4 billion, or about $1.18 billion, refers to Saudi Arabian government contracts awarded to defense contractor BDM in the early to mid 1990s. Carlyle, however, sold its interest in BDM before former President George H. W. Bush joined as an advisor. Although, it should be noted that Bush family confidant James A. Baker was on the board when the interests were sold.[citation needed]|}}.

The Saudi Arabian relatives of Osama bin Laden were also investors in Carlyle until October 2001 when the family sold its $2.02 million investment back to the firm in light of the public controversy surrounding bin Laden’s family after the terrorist attack on September 11, 2001. The bin Laden family has publicly disowned the al-Qaeda leader.[5] Osama bin Laden has no publicly known or acknowledged economic interest in Saudi Binladin Group (SBG), whose investments were in part managed by the Carlyle Group until the arrangement was terminated by mutual consent.

  1. ^ Carlyle Group website http://www.carlyle.com/eng/company/l3-company732.html
  2. ^ David A. Vise, "Area Merchant Banking Firm Formed," Washington Post, Oct. 5, 1987, F33.
  3. ^ Paul Farhi, "Chi-Chi's Bid Won D.C. Investment Firm Wall Street's Attention," Washington Post, June 6, 1988, F1.
  4. ^ John Mintz, "Founder Going Beyond the Carlyle Group," Washington Post, Jan. 9, 1995, F9.
  5. ^ "The Carlyle Group to Acquire Synagro Technologies for $5.76 Per Share" 2007-01-29
  6. ^ Reuters/Yahoo! News: "GM selling Allison for $5.6 billion," 2007-06-28
  7. ^ CNN Money: "Virgin Media In Talks With Carlyle Group Over Buyout," 2007-07-02
  8. ^ "Carlyle Group acquires Applus," 2007-07-28
  9. ^ [1]
  10. ^ [2]
  11. ^ [3]

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