Carlyle Group's Business in Iran

The Carlyle Group filed a 99.2 with the Securities & Exchange Commission on its business dealings with Iran.  The filing stated:

We have been advised by Applus Servicios Technologicos S.L.U. (“Applus”), a European company in which our private equity funds have invested and which may be considered our affiliate, that in 2012, a subsidiary of Applus provided certain services to customers that could be affiliated with the Industrial Development and Renovation Organization (IDRO), which has been designated as an agency of the Government of Iran. For 2012, gross revenue attributable to such sales was €1,189,532 with estimated net profits to Applus of approximately €200,000. At this time, we are unable to determine whether the IDRO, directly or indirectly, controls these customers. Although these activities were not prohibited by U.S. law at the time they were conducted, Applus has advised us that its subsidiary has discontinued its dealings with such customers, other than limited wind-down activities (which are permissible), and that it does not otherwise intend to continue or enter into any Iran-related activity. 

How many more private equity underwriters (PEU's) will disclose affiliate business with Iran?  Carlyle is often at the vanguard, sometimes in disturbing ways.

Update 3-15-13:  KKR disclosed its affiliate sales to Iran.  Blackstone Group also had affiliate Travelport do over $8 million in business with Iran.

Carlyle's Co-founders: Major Bacon

Bloomberg reported:

William Conway, Daniel D’Aniello and David Rubenstein were each paid a $275,000 salary, Washington-based Carlyle said today in a regulatory filing. Each founder owns 15.4 percent of the company’s partnership units, a stake that produced $57.3 million in cash distributions during the year. Conway, D’Aniello and Rubenstein also received $140 million, $80 million and $78 million, respectively, in distributions from previous personal investments, Carlyle said. 

That means a good year for the DBD's:

David -- $135.6 million
Bill --  $197.6 million
Danny -- $137.6 million

How far will this drive the DBD's up the Forbes Billionaire list?  Add the increased value of Carlyle's stock, up 47% post IPO, and the PEU boys could jump a few spots. 

Easy Credit in PECKER Land!

Businessweek reported:

NBTY, the Carlyle Group LP-controlled maker of nutritional supplements, is seeking to cut borrowing costs on a $1.51 billion term loan to 2.5 percentage points more than Libor from 3.25 percentage points, according to another person with knowledge of the matter, who asked not to be identified because it’s private. 

Remember the easy credit terms during the PEU manic buying spree from 2005-2007 and the crazy securitizations?  Could they be back?

Add this blurb from the same story:

Blackstone Group LP (BX) tripled a credit line to $2.1 billion from $600 million to buy single-family homes, according to a person with knowledge of the matter. Deutsche Bank AG is leading the transaction for the manager of the largest real estate private-equity fund, which has invested $3.5 billion to buy 20,000 single-family rental homes since last year. 

Welcome to Pecker-rville...

Private Equity Capital Knowledge Executed Responsibly.

Carlyle to Monetize 650 Madison

Bloomberg reported:

Carlyle Group LP (CG) is putting midtown Manhattan’s 650 Madison Ave. on the market, with a sale expected to fetch more than $1.3 billion.

Carlyle and a partner bought the building from Hiro North American Properties for $695 million in April 2008, and refinanced it in 2010.  

Another Carlyle double.

Carlyle Contracts Fundraising for Small People

WSJ reported The Carlyle Group will allow little investors, those with $50,000,into its private equity funds.  The trick is small investors will need to go through Central Park Group and incur an additional 1.8% fee for the privilege.  This is on top of Carlyle's standard 1.5% management fee and 20% of profits. 

Carlyle's "distinctive competencies" included its private, non-publicly traded status and investor exclusivity.  Carlyle went public, trashing that sales line.  It seems exclusivity could be next.  A toast to the small people and their PEU hopes. 

Update 4-22-17:  PEUs still want 401k holders to invest in private equity and Central Park Group continues pushing private equity..

Carlyle's LifeCare to Stiff Uncle Sam

The Carlyle Group's LifeCare saga continues.  Carlyle's LifeCare Hospitals ownership began auspiciously.  Weeks after Carlyle purchased LifeCare, twenty five patients died in Hurricane Katrina's aftermath.  The Bush White House helped Carlyle keep their good name by not mentioning the hospital with the highest patient death toll in Fran Townsend's Lessons Learned report.

After seven years of bad luck, i.e. Carlyle ownership, LifeCare went on financial life support, entering bankruptcy.  Law360 reported:

The U.S. government asked a Delaware bankruptcy judge Friday to upend the proposed sale of LifeCare Holdings Inc.’s 27 hospitals, saying the private equity-owned company can’t pay potentially $24 million in taxes on the deal.

Texas-based Lifecare — owned by Carlyle Group LP — has received a $320 million credit bid for its assets from lenders.  But the stalking horse bid is substantially higher than the tax basis of the assets, resulting in a big tax bill that the company concedes it can’t cover. 

Heaven forbid Carlyle's billionaire co-founders make good on their affiliate's commitments.
 
LifeCare's news release on the "acquisition" stated:

The Company has entered into a commitment for a $25 million debtor in possession financing facility arranged by JPMorgan Chase which is subject to court approval Additionally, the Company enters the Chapter 11 process with ample liquidity, having approximately $20 million of cash on hand.  

Carlyle's co-founders would rather pay anything but taxes.

Female NSA Chiefs Named Rice

While Susan Rice makes headlines as the likely replacement for National Security Advisor Tom Donilon (of FannieMae fame), another NSA Rice, Condoleezza, lurks in the shadows.

Condoleezza sits on the board of KiOR, an alternative fuels company.  Her 2011 board compensation totaled nearly $3.5 million, with most of that in stock compensation.  Their annual proxy statement stated:

Currently, Dr. Rice is on the board of Makena Capital, a private endowment firm, and C3, an energy software company.

Makena Capital sells to the same clientele as private equity underwriters, albeit with a very different pitch.   Rice calls Makena a private equity firm in one bio.

Condoleezza and Mike McCaffery, Makena Capital's co-founder and CEO, sit on the board of C3, a company offering smart grid analytics. 

Susan Rice could be the next Condoleezza Rice, spying on Americans and ensuring her exalted place in the Government-Corporate Monstrosity, where riches flow to members, regardless of crimes committed.  A GCM card comes with privileges. 

Update 3-10-13:  As for riches flowing to card carrying GCM members, France's Nicholas Sarkozy had €500 million thrown at him to invest for Qatar's landed gentry