Monday, May 17, 2010

The Carlyle Group's Transparency

The Carlyle Group's 2009 Annual Report hit the wires. It was the best of times, despite it being the worst of times for the politically-connected private equity underwriter (PEU). Carlyle "raised" over $15 billion in the economic depression. Here's their slant:

Despite the challenges in the fundraising markets, Carlyle had final closes on nine funds totaling $15.6 billion in capital commitments from January 2009 through March 2010. The funds include:

Carlyle Asia Partners III, L.P. at $2.55 billion
Carlyle Asia Growth Partners IV, L.P. at $1.04 billion

Carlyle Asia Real Estate Partners II, L.P. at $485 million

Carlyle Global Financial Services Partners, L.P. at $1.1 billion

Carlyle MEN A Partners, L.P. at $500 million

Carlyle Mezzanine Partners II, L.P. at $553 million

Riverstone/Carlyle Global Energy and Power Fund IV, L.P. at $6.0 billion

Riverstone/Carlyle Renewable and Alternative Energy Fund II, L.P. at $3.4 billion

A small global credit fund.

Despite their citation of Carlyle as "an industry leader in accountability, transparency and corporate responsibility,” the report failed to mention $70 million in settlements regarding a New York pension "pay to play" investigation. Here's that breakdown:

1. Carlyle Group--$20 million
2. Riverstone Holdings--$30 million
3. David Leuschen, founder of Riverstone--$20 million

The report mentioned the BankUnited deal and it winning the "Financial Institution Deal of the Year Award." Carlyle stated:

Florida’s BankUnited was reestablished as a strong and well-capitalized bank as the result of an investment made by Carlyle and other investors in 2009.

It failed to cite $4.9 billion in FDIC subsidies, a considerable source of capital. Uncle Sam is a major benefactor for Carlyle. That is one of many facts not illuminated in this transparent report. Carlyle went light on their failures.