Private Carlyle Allows a Peek Inside

For the first time, D.C. private-equity company Carlyle Group is allowing the public to view its annual report.
For the first time, D.C. private-equity company Carlyle Group is allowing the public to view its annual report. (Carlyle Group)
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Monday, June 23, 2008

Here it is, hot off the presses.

D.C. private-equity giant Carlyle Group's eighth annual report -- but the first one made available to the public -- is out today. There are no surprises in the slickly produced 56-page document, but there is lots of information about a firm hitherto known for its opaqueness and mystery.

For instance:

Carlyle is huge. It started in 1987 with 10 employees and $5 million in investments. Now it has 950 professionals in 33 offices, scouring the globe for places to invest its $81 billion in client money.

Carlyle has 1,200 investors from 68 countries.

Its 224 companies employ more than 350,000 people around the world.

Where do the investments come from? Public pensions constitute 41 percent, financial institutions 32 percent and high-net-worth individuals 14 percent. The rest comes from corporate pensions, foundations and others.

Sixty percent of investment money comes from North America, 26 percent from Europe and 14 percent from Asia.

Where does the money go? The biggest chunk of investors' money is in energy and power, and in real estate, each at 18 percent. Those are followed by telecom and media at 11 percent, consumer and retail at 10 percent, then by technology, industrial, transportation and health care. Aerospace, responsible for some of Carlyle's biggest home runs in the past, is 6 percent of investments.

"We made this public to better explain who we are as a firm and as an industry," said Carlyle spokesman Chris Ullman. To that end, the report includes a series of up-close analyses of Carlyle-owned businesses, including a British-based maker of industrial metal products and a 30-story office building in downtown Los Angeles.

Carlyle founders Daniel D'Aniello, William Conway Jr. and David Rubenstein -- known as DBD inside the firm -- extol the private-equity giant's progress in a letter to investors, pointing out that the firm last year returned $8.9 billion in equity and profit to those investors, its second richest year after 2006, when it gave back $10.2 billion.

The Big Three also acknowledged last year's stumble: the $700 million implosion of Carlyle Capital, the offshore public company that invested in mortgage-related securities.

"We believe Carlyle's other investment funds are well positioned -- and well equipped -- to weather the current storm and profit from the extraordinary investment opportunities it is likely to create," said the founders in their letter.

Sounds like a plan.

-- Thomas Heath

© 2008 The Washington Post Company