The sale of Calpers's stake in Carlyle - valued at $373.3 million as of the end of stock market trading on Monday - comes 13 months after Carlyle's initial public offering. Its shares have risen 34 percent since then.
Calpers, which is the biggest U.S. public pension fund and is also an investor in many of Carlyle's funds, acquired a 5.5 percent stake in Carlyle in 2001 for $175 million.
That's a $198.3 million profit from holding Carlyle for twelve and a half years, roughly a 9% annual return on equity. This is well below Carlyle's historical 30% annual investor return, frequently hawked by co-founder David Rubenstein.
In February 2001 The Carlyle Group managed $5.8 billion in assets. That's now $176.3 billion. Assets under management grew nearly 3,000%, while CalPERs equity investment return came in at single digits.
Consider this statement when CalPERS bought 5.5% of Carlyle, which later fell to 4.1% due to share dilution:
The $170bn pension fund took a stake in US private equity powerhouse The Carlyle Group in a deal valuing the private equity firm at $3.5bn.Carlyle is now the $170 billion PEU fund. Bloomberg reported on Carlyle's valuation when it went public
The IPO values Carlyle at about $6.7 billion.
How will current unit holders fare?. It's not clear, but we know private equity mavens like to exit high. CalPERS Carlyle investment is hardly the expected home run for an early investor in an explosive market segment.
As for why Calpers may be leaving the Carlyle fold, consider the pension's recommendations for Nabors Industries board. Carlyle's eunuch unit holders have similar rights as Nabors shareholders. Did CalPERS grow a set?
Update 6-6-13: The 11.06 million common unit public offering has been priced at $27.00 per unit. That means CalPERS grosses $300 million, not even a double for holding Carlyle for a Baker's dozen. That's slow rising dough...
