Thursday, July 5, 2012

Carlyle Exits 666 Fifth Ave. in Manahattan

The Carlyle Group and its real estate investment partners sold their remaining interest in 666 Fifth Avenue's retail space for $710 million.  Carlyle & company previously sold a portion of that asset for $324 million, making total sale proceeds of over $1 billion.  Carlyle's purchase in June 2008 was valued at $525 million.   Prior to the September 2008 financial crisis, private equity underwriters (PEUs) put up a small amount of equity and financed most of their deals with debt. 

Not counting management fees or special dividends/distributions, Carlyle et al doubled their money in four short years.   I see the shedding of 666 as symbolic given PEUs are the answer to all America's ills.  Carlyle's David Rubenstein saves pandas, rare documents, the Washington Monument and now a Sunoco refinery.  What's next, the National Park Service?  All hail Carlyle and their PEU brethren, one of whom may soon be President.  The 666 label is long gone.

I wonder how private equity made it through the last decade without one 60 Minutes story.  A recent CBS News story missed PEU management fees charged to affiliates.  It's a new day for PEU's who've shed their financial antichrist label.  The global PEU future holds sweetness, butter and light.  Red and blue love PEU.

Update 11-24-16:  The Carlyle Group's investment in 666 Fifth Avenue saved President Elect Donald Trump's son in law Jared Kushner who'd bought the building in late 2007 for $1.8 billion. (Source: Forbes)

Update 1-8-17:  The man Carlyle saved may join the White House team as President Trump's main adviser, the role he played in the campaign.  WilmerHale's Jamie Gorelick, the greed queen of disaster, is on Kushner's side.  Also, Kushner's brother Josh has his own PEU, Thrive Capital, which doubled its investment in Instagram in 3 days.