Monday, November 27, 2023

MidCap 400 Index to Include Carlyle

The Carlyle Group will join the S&P MidCap 400 starting November 30.  Carlyle will replace ICU Medical which will drop to the SmallCap 600.

Ironically both Carlyle and ICU Medical expressed interest in buying two Medtronic divisions.  Carlyle is currently under exclusive negotiations with Medtronic for those businesses.  Carlyle hopes to use debt that turns interest payments into more debt.  That's like a homeowner's mortgage interest being added to the mortgage principal. 

One index deletion involves private equity underwriter (PEU) Clayton, Dubilier and Rice, which is buying Veritiv Corporation.  Aretec Group is acquiring Avantax, which delivers tax-intelligent wealth management solutions for financial professionals.  The PEU boys hate paying taxes.

Index investors can buy a chunk of Carlyle stock, which lagged a different index, according to Pensions&Investments:

Over the last 10 years, Carlyle had a 6.6% annualized return vs. 9% for the DJ US Asset Managers index and 12.3% for the S&P 500 index.

Irony upon irony.