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 $56 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 395 investment professionals in 16 countries with several offices in North America, Europe and Asia; its portfolio companies employ 200,000 people worldwide. The academic qualifications of its staff include 160 MBAs, 28 JDs and 14 Ph.D/MDs from many of the world’s most prestigious universities. Carlyle has over 1000 investors in 57 countries.

Contents 1 Origin 2 Specialization 3 Current portfolio and major acquisitions 4 Controversy 5 Notable current and former employees and affiliated persons 5.1 Business 5.2 Politics and public service 5.3 Other 6 See also 7 References 8 Further reading 9 External links 9.1 Criticism

[edit] Origin

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," where they first met to discuss the idea. Carlyle's current chairman is Lou Gerstner, former chairman and CEO of IBM.

[edit] Specialization

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 — though this translates, for example, into a 33.8% ownership of QinetiQ, the UK's recently privatized defence company.

[edit] Current portfolio and major acquisitions

Though known for its expertise in aerospace and defense, more than thirty percent of Carlyle’s invested assets are 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.

[edit] Controversy

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 [1] linked to such investments. Carlyle is the largest private equity firm located in Washington, D.C., its corporate headquarters are located on Pennsylvania Avenue.

Critics refer to Carlyle as a private military contractor, because it owns controlling or partial interests in several military contractors. For example, it used to own United Defense Industries, which was developing the Crusader artillery project. This project was funded in eight consecutive Clinton budgets but was cancelled soon after Bush became president, which eliminated the remaining $9 billion of the original $11 billion contract. A much smaller contract was awarded to United Defense to capture technologies developed during the eight years of development.

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, 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.

Former President George H.W. Bush retired from Carlyle in October 2003. George W. Bush served on the Board of Directors of early Carlyle acquisition Caterair. Bush left the board in 1992 to run for Governor of Texas.

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 September 11. The bin Laden family has publicly disowned the al-Qaeda leader.^{[citation needed]} Osama bin Laden has no 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.

[edit] Notable current and former employees and affiliated persons

[edit] Business

• G. Allen Andreas - Chairman of the Archer Daniels Midland Company
• Daniel Akerson - company director
• Joaquin Avila - investment banker
• Laurent Beaudoin - CEO of Bombardier (1979-?)
• Paul Desmarais - Chairman of the Power Corporation of Canada
• Arthur Levitt - former Chairman of the U.S. Securities and Exchange Commission
• Karl Otto Pöhl - former President of the Bundesbank
• George Soros - billionaire and political backer

[edit] Politics and public service

• James Baker III, former United States Secretary of State under George H. W. Bush, Staff member under Ronald Reagan and George W. Bush, Carlyle Senior Counselor, served in this capacity from 1993 to 2005.
• George H. W. Bush, former U.S. President, Senior Advisor to the Carlyle Asia Advisory Board from April 1998 to October 2003.
• George W. Bush, current U.S. President. Was appointed in 1990 to the Board of Directors of one of Carlyle's first acquisitions, an airline food business called Caterair, which Carlyle eventually sold at a loss. Bush left the board in 1992 to run for Governor of Texas.
• Frank C. Carlucci, former United States Secretary of Defense from 1987 to 1989; Also, former Princeton wrestling partner of former US Secretary of Defense, Donald Rumsfeld. Carlyle Chairman and Chairman Emeritus from 1989 to 2005.
• Richard Darman, former Director of the U.S. Office of Management and Budget under George H. W. Bush, Senior Advisor and Managing Director of The Carlyle Group from 1993 to the present
• Allan Gotlieb, Canadian ambassador to the United States (1981-89) and member of Carlyle's Canadian advisory board.
• Liu Hong-Ru, former chairman of China's Securities Regulatory Commission
• William Kennard, Chairman of the U.S. Federal Communications Commission (FCC) under President Bill Clinton, Carlyle's Managing Director in the Telecommunications & Media Group from 2001 to the present.
• Arthur Levitt, Chairman of the U.S. Securities and Exchange Commission (SEC) under President Bill Clinton, Carlyle Senior Advisor from 2001 to the present
• Peter Lougheed - Premier of Alberta (1971-85)
• John Major, former British Prime Minister, Chairman, Carlyle Europe from 2002 until 2005
• Frank McKenna, Canadian ambassador to the United States and former member of Carlyle's Canadian advisory board
• Mack McLarty, White House Chief of Staff under President Bill Clinton, President of Kissinger McLarty Associates, Carlyle Senior Advisor from 2003 to the present
• Anand Panyarachun, former Prime Minister of Thailand (twice), former member of the Carlyle Asia Advisory Board until the board was disbanded in 2004
• Fidel Ramos, former president of the Philippines, Carlyle Asia Advisor Board Member until the board was disbanded in 2004
• Dan Senor - political consultant
• Thaksin Shinawatra, deposed Prime Minister of Thailand, former member of board, who resigned on taking office in 2001
• Luis Téllez Kuenzler, Mexican economist, current Secretary of Communications and Transportation under the Calderon administration and former Secretary of Energy under the Zedillo administration.

[edit] Other

• Norman Pearlstine - editor-in-chief of Time (1995-2005)

[edit] See also

• Private equity
• Leveraged buyout
• Military industrial complex
• Saudi Arabia

[edit] References

[edit] Further reading

• James K. Glassman, "Big Deals," Washingtonian Magazine, June 2006 http://carlyle.com/eng/news/l3-presskit591.html
• Geoffrey Colvin & Ram Charan, "Private Lives," Fortune Magazine, November 27, 2006 http://money.cnn.com/magazines/fortune/fortune_archive/2006/11/27/8394344/?postversion=2006112713
• Emily Thornton, "Carlyle Changes Its Stripes," Business Week, February 12, 2007 http://www.businessweek.com/magazine/toc/07_07/B4021magazine.htm
• Dan Briody, The Iron Triangle: Inside the Secret World of the Carlyle Group, John Wiley & Sons, 2003, ISBN 0-471-28108-5.

[edit] External links

• The Carlyle Group home page
• Hoover's profile

[edit] Criticism

• Making a mint inside "the iron triangle" of defense, government, and industry, Dan Briody, propagandamatrix mirror
• What Did Eisenhower Mean When He Warned of a Military Industrial Complex? Take a Look at the Carlyle Group An interview with Dan Briody
• The Carlyle Group purchases Stop Carlyle web domains., in French.
• The Carlyle Group at hereinreality.com, with many links.
• VPRO Tegenlicht: Carlyle Group (uses Flash), documentary created by Dutch VPRO TV program Tegenlicht; in Dutch.
• De IJzeren Driehoek (Exposed: The Carlyle Group) by VPRO Dutch television High-speed internet connection. Note: The first minute and fortyseven seconds of this program is broadcast in Dutch, The remainder is in English.
• Sourcewatch article
• "Greed of the highest order and the worst privatisation since rail" by George Monbiot, on the privatisation of Qinetiq, the British government's defence research service, giving the Carlyle Group around £351m on their 31% share bought in 2002 for £42m. The Guardian, February 14, 2006
• "Bush special envoy embroiled in controversy over Iraq debt" by Naomi Klein, about a deal in Kuwait. The Guardian, October 13, 2004