Wednesday, April 27, 2011

"Great Cash In" Sends $6.4 billion to Carlyle Investors

Bloomberg reported:

Carlyle Group, the buyout firm that may go public this year, distributed more than $6.4 billion to investors in the first quarter, the most in its 24-year history.
The carry on $6.4 billion would be $1.6 billion.   Carlyle's founders, nicknamed the DBD's, owe Senators Schumer, Bayh, and Baucus, as well as President Obama, a huge thanks on extending their preferred carried interest taxation.  That saved $400 million in taxes.

Carlyle's first IPO came in Europe via Carlyle Capital Corporation (CCC).  It and hedge fund BlueWave Partners collapsed in 2008.  The two moves came while financial firms felt they could do no wrong.  Carlyle unwound BlueWave at a huge loss for investors.

Interestingly, Carlyle bought into hedge fund Claren Road in December.  Is it a sign of frothiness?  Apparently not.

“Now is an opportune time to put capital to work,” (Carlyle) founders William E. Conway, Daniel A. D’Aniello and David M. Rubenstein said in the letter. The firm has “endeavored to find attractive investment opportunities which we believe will ultimately result in superior absolute investment returns.” 
These three are consummate salesmen.  Beware the puffery.

Update 5-5-11:   Bloomberg reported Rubenstein de-emphasized the buyout side of Carlyle's business for the looming IPO.  Carlyle's "great cash in" should make their financial statements shine in the S-1.  Investors may jump in as the barn door closes.  Through the cracks they'll see the DBD's hauling away trailer loads of cash.

Update 5-23-11:  WSJ finally catches up to the story, or are they pumping Carlyle's looming IPO?  Bloomberg added to the hype by re-running the $6.4 billion payout story.