Carlyle Group wants to put the most positive spin on its offering

Looking to get in on the source of the cash that’s fueling Carlyle Group co-founder David M. Rubenstein’s big gifts, such as the $7.5 million to fix the Washington Monument?

The instructions are buried on page 19 of Carlyle’s recent filing with the Securities and Exchange Commission.

In a long paragraph headlined “Cash Distribution Policy,” the District-based private-equity giant informs would-be shareholders that it plans to pay quarterly dividends of 16 cents when it goes public.

Carlyle, the world’s second-largest buyout firm by assets under management, is expected to go public early next month.

The firm last week launched a global “road show” — hitting cities such as Montreal, Milan, Dubai and Kuwait City. Teams, led by the founders — Rubenstein, William E. Conway Jr. and Daniel A. D’Aniello — touted the investment prospects of the 30.5 million shares it plans to sell, which is about 10 percent of the total shares, according to the SEC filing.

The financial giant wants to put the most positive spin on its offering, which follows the less-than-enthusiastic initial public offering by Los Angeles-based Oaktree Capital earlier this month. Oaktree saw its shares open below its $43 offering price, and it sold around $400 million of the more than $500 million in stock it had hoped to sell.

“Carlyle is trying to do everything they can to make sure this is well received,” said Colin Blaydon of Dartmouth College’s Tuck School of Business. “What is important to them is how this stock performs down the road. They need to have a strong performance of this public security to be able to do a secondary offering for the founders and other owners who want to be able to sell their stock in the future at a decent price. That’s a big part of the motivation for these firms going public.”

Carlyle has said in past government filings that none of its partners will sell any shares at the time the firm goes public.

The firm also has self-imposed restrictions on sales that allow its founders and employees to sell shares only during certain windows.

It’s unusual for companies to pay a dividend upon going public, but it’s not unheard of in the cash-rich financial services field. Carlyle’s peers, such as the Blackstone Group, have paid dividends in most quarters, starting with their IPO.

Carlyle makes a lot of money for its investors — and for the firm’s 100 or so partners, too. Its three founders each took home nearly $138 million last year, which was one of the firm’s most profitable.

If the company were public last year, the dividend yield might have ranged between 7.6 and 9.3 percent.

We’ll see.

By the numbers

16 cents

the quarterly dividends Carlyle plans to pay when it goes public.

30.5 million

the amount of shares Carlyle plans to sell. That’s 10 percent of its total shares.

$138 million

About how much each of the firm’s three founders took home last year.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. He has also covered local news, including the Maryland General Assembly and investigative work in Fairfax county. He has served as a correspondent for Newsweek and The Post, participating in coverage of the Oklahoma City bombing, the Unabomber and the O.J. Simpson trial. Heath was born and raised in Syracuse, N.Y., where he attended Catholic schools. He is a graduate of Fordham University and was a 2001-2002 fellow at Columbia University’s Knight/Bagehot business fellowship program.
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