Carlyle's Natural Resources Cornerstone Doesn't Count

The Carlyle Group is skilled in creating unique measures that maximize the private equity underwriter's image.  The latest is an emissions report that omits Carlyle's significant ownership position in NGP Energy Capital Management.  WaPo reported:

At the start of 2022, the Carlyle Group, one of the world’s leading private equity firms, published a report on its financial risk from greenhouse gas emissions. Yet something was not in the report.

Carlyle’s largest oil and gas investment, NGP, was not included. A “note on scope” halfway through the document said this was due to a “different business model.”

If energy prices remain high, NGP is on track to earn $1 billion for Carlyle this year. 

Carlyle made the investment in December 2012.  Their press release stated:

Global alternative asset manager The Carlyle Group (NASDAQ: CG) today announced it has added significant capability to its growing global natural resources investment platform. Carlyle has acquired a 47.5 percent revenue interest in NGP Energy Capital Management, an Irving, TX-based energy investor with $12.1 billion in assets under management. Carlyle will pay, at closing, $424 million to acquire Barclays Natural Resource Investments' ("BNRI") 40 percent stake and 7.5 percent from NGP's management. 

The transaction, which will be funded with cash and Carlyle Holdings partnership units, has closed today, December 20. The transaction also includes: a right to purchase an incremental 7.5 percent revenue interest, which would bring Carlyle's total revenue interest to 55 percent; 7.5 percent of the carried interest in all future funds; and options to acquire BNRI's 40 percent interest in the carried interest in NGP's current flagship fund (NGP Natural Resources X, L.P.) and all future NGP funds. 

NGP will serve as the cornerstone of Carlyle's growing natural resources investing platform

NGP is not an official part of Carlyle carbon wise.  This hearkens back to Carlyle running from the carcass of Carlyle Capital Corporation (CCC).  CCC was a highly leveraged mortgage backed security fund sold as a "safe investment."  CCC folded in February 2008.  I'll venture massive investor losses in CCC were never included in Carlyle's top secret investment return formula.  

The more you know about a measure the better you are able to understand what it actually says.

"An operational definition is a procedure agreed upon for translation of a concept into measurement of some kind." An operational definition specifically states how to measure the item being defined. Many difficulties can arise without operationally defined measures.--Dr. W. Edwards Deming

Opaque measures, ring fencing problem results...fudging is the PEU way. 

Update 9-30-22:  FT ran a letter which stated: 

 ...the path that has worked for private equity, not normally for countries. There are four stages. One, load the victim organisation up with debt. Two, bleed off cash and assets to provide excessive rewards for the inner circle. Three, massage the numbers to flatter the performance of the victim company. Four, get out fast and leave others holding the can.

Update 8-17-23:  Carlyle left NGP out of their 2023 ESG report.  The PEU boys love holding up a mirror that shines them in the best light.