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
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
California Public Employees' Retirement System, or CalPERS, owns
more than 5% of Carlyle.
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
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
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.
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
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
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
0. Arthur Levitt, Senior Advisor
0. "Mack" McLarty, Senior Advisor