Carlyle Group



According to the company web site, The Carlyle Group, headquartered in Washington D.C., was established in 1987 as a "private global investment firm that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings."
Carlyle states that its "mission is to become the premier global private equity firm and to generate extraordinary returns while maintaining our good name and the good name of our partners. Toward that end, we have established a family of funds in the Carlyle name and a network of offices around the world. We maintain the highest standards of ethical conduct and employ a conservative, proven and disciplined approach to investing."
The collection of influential characters who now work, have worked, or have invested in the group would make the most convinced conspiracy theorists incredulous. They include among others, John Major, former British Prime Minister; Fidel Ramos, former Philippines President; Park Tae Joon, former South Korean Prime Minister; Saudi Prince Al-Walid; Colin Powell, former Secretary of State; James Baker III, former Secretary of State; Caspar Weinberger, former Defense Secretary; Richard Darman, former White House Budget Director; the billionaire George Soros, and even some bin Laden family members. You can add Alice Albright, daughter of Madeleine Albright, former Secretary of State; Arthur Lewitt, former SEC head; William Kennard, former head of the FCC, to this list. Finally, add in the Europeans: Karl Otto Poehl, former Bundesbank president; the now-deceased Henri Martre, who was president of Aerospatiale; and Etienne Davignon, former president of the Belgian Generale Holding Company.
Hoover's Online describes the Carlyle Group as a military-industrial complex. The Carlyle Group, Hoover's continues:
takes part in management-led buyouts (MBOs), acquires minority stakes, and provides other investment capital for companies. It is particularly hawkish on the aerospace and defense industries, putting to good use the experience of its chairman emeritus Frank Carlucci, a former Secretary of Defense. Firms in this arena make up a significant share of the portfolio at Carlyle, one of the world's largest private equity firms. The company has also engineered MBOs and other capital deals for firms in such industries as consumer products, energy, health care, information technology, real estate, beverages, and telecommunications. Carlyle's directorship reads like George Walker Bush's inaugural ball invite list. Reagan Secretary of the Treasury James Baker serves as a senior counselor, and Richard G. Darman, former director of the Office of Management and Budget under George Herbert Walker Bush, is a managing director. Former President George Bush has served with Carlyle and Colin L. Powell, before becoming Secretary of State, made an appearance on behalf of the firm.

The company has more than $13 billion in assets under management and has invested in such names as: United Defense Industries, of Crusader artillery and Bradley Fighting Vehicle fame; Dr Pepper/Seven Up Bottling Group; and MedPointe Inc.. Carlyle owns about 90% of Voight Aircraft Industries, Inc.

Although the majority of the firm's money is in North America, it is also pushing more intensely overseas, launching funds aimed at Asia, Europe, Latin America, and Russia. The firm (along with Apax Partners and UK-based Cinven) bought a 28% share of France-based health care and business publisher Vivendi Universal Publishing. One of the company's larger moves overseas is the purchase of the transportation business of The Daiei, Japan's #2 retailer in which the company has a 90 percent stake, worth $28 million.

Its moves overseas haven't all been as easy as picking up the phone or as lucrative, however. Carlyle, along with investment firm Welsh, Carson, Anderson & Stowe, are planning to buy the yellow pages business of the financially strapped Qwest Communications while navigating the lawsuit filed by Milberg Weiss Bershad Hynes & Lerach LLP. The firm also returned portions of its European venture capital group funds to investors after the values of its investments lessened and the availability of target acquisitions decreased.

Carlyle is keeping an eye on the transportation and healthcare industries as possible candidates for deal making, but the maturing buy-out market creates fewer prize deals and more competitors.[7]
California Public Employees' Retirement System, or CalPERS, owns more than 5% of Carlyle.[8]

The following is taken from Hoover's Online:
In 1987 T. Rowe Price director Edward Mathias brought together David Rubenstein, a former President Carter aide; Stephen Norris and Daniel D'Aniello, both executives with Marriott Corp.; William Conway, Jr., the CFO of MCI; and Greg Rosenbaum, a VP with a New York investment firm. They pooled their experience along with a load of money from T. Rowe Price Associates, Alex. Brown & Sons (now Deutsche Banc Alex. Brown), First Interstate (now part of Wells Fargo), and Pittsburgh's Mellon family to form a buyout firm.

Named after the Carlyle Hotel in New York, the firm opted to make Washington, DC, its headquarters so it wouldn't get lost in the crowd of New York investment firms. The company spent its first years investing in a mish-mash of companies, using Norris' and D'Aniello's Marriott experience to focus primarily on restaurant and food service companies (including Mexican restaurant chain Chi-Chi's).
In 1989 it wooed the well-connected Frank Carlucci, who had served as President Reagan's secretary of defense, to join the group. Soon thereafter, Carlyle began making more high-profile deals. That year it acquired Coldwell Banker's commercial real estate operations (sold 1996) and Caterair International, Marriott's airline food services (sold 1995).

Carlucci helped redirect the firm's focus to the downsizing defense industry. Among its targets were Harsco Corp. (1990), BDM International (1991), and LTV Corp.'s missile and aircraft units (1992). Carlyle helped overhaul their operations and make them attractive (for the right price) to the industry's elite, including Boeing and Lockheed Martin.

As the company's reputation grew, so did its cast of players. Among its new backers were James Baker and Richard Darman (both Reagan and Bush administration alums) and investor George Soros, who chipped in some $100 million into the Carlyle Partners L.P. buyout fund. With the help of its 'access capitalists' such as Baker and Saudi Prince al-Waleed bin Talal (whom the firm helped add to his fortune in a 1991 Citicorp stock transaction), Carlyle made deals in the Middle East and Western Europe (including a bailout of Euro Disney) in the mid-1990s.

While the firm continued to be a side in the iron triangle, acquiring such defense companies as aircraft castings maker Howmet in 1995, it picked up a grab bag of holdings, such as natural food grocer Fresh Fields Markets (1994; sold 1996); the quick turnaround helped build Carlyle's war chest. The firm also began investing in industrial-cleanup companies, seeing increased government spending as a major opportunity for profit.

As Carlyle's esteem rose, so did the number of its investors. In the late 1990s the firm launched buyout funds targeting Asia (closed 1999), Europe (closed 1998), Russia, and Latin America. At home, it faced a dwindling number of opportunities as the long-running bull market drove up prices and more investors chased fewer deals. Among those was its partnership with Cadbury Schweppes to buy the Dr Pepper Bottling Co. of Texas and merge it with its own American Bottling Co.

Carlyle began the new century by launching Carlyle Asset Management Group, selling its stake in Le Figaro to Socpresse, acquiring Rexnord and a majority stake in CSX Lines. Extending its reach, the company partnered with GMT Communications Partners and acquired Casema in 2003.

Carlyle Funds
The Carlyle Funds include: U.S. Buyout Funds group; U.S. Venture Funds group; U.S. Real Estate Funds group; U.S. High Yield Funds group; Europe Buyout Fund; Europe Venture Fund; Asia Buyout Fund; Asia Venture Fund; and Carlyle/Riverstone Global Energy and Power Funds.
Founding Partners and Senior Advisors
0. Louis V. Gerstner, Jr., Chairman
0. The Rt. Hon. John Major, Chairman of Carlyle Europe
0. Frank Charles Carlucci III, Chairman Emeritus
0. William E. Conway, Jr., Co-Founder and Managing Director
0. Daniel A. D'Aniello, Co-Founder and Managing Director
0. David M. Rubenstein, Co-Founder and Managing Director
0. James Addison Baker III, Co-Founder and Senior Counselor
0. Edward Mathias, Managing Director
0. Richard G. Darman, former Managing Director
0. B. Edward Ewing, Managing Director and CEO, Carlyle Management Group
0. John F. Harris, Managing Director and CFO
0. Leslie L. Armitage, Managing Director, US Buyouts
0. S. Abramowitz, Managing Director, US Buyouts, Healthcare
0. David Kupperman, Principal, Carlyle Asset Management Group
0. Michael B. Kim, President, Carlyle Asia; Non-managing Director Koram Bank
0. Arthur Levitt, Senior Advisor
0. "Mack" McLarty, Senior Advisor

Carlyle Group

Home Page