Traditionally, the role of private equity is to buy mature companies and find ways to improve the operations. The result is often a tidy profit.

But over the past couple years, the strategy has been undergoing some changes. Look at the Carlyle Group. Recently, the firm invested $60 million in three growth companies in China. In fact, these deals came only four months after Carlyle raised its Asia Growth Partners IV fund.

Continue reading Carlyle looks south-of-the-border for deals

Carlyle looks south-of-the-border for deals originally appeared on BloggingStocks on Thu, 03 Dec 2009 12:40:00 EST. Please see our terms for use of feeds.

American International Group (NYSE: AIG), once the world's largest insurer, is selling assets outside the U.S. to repay a government bailout. The Carlyle Group, KKR, JC Flowers, and other U.S. private equity firms and Asian financial groups are reported to be interested in AIG's Taiwanese unit Nan Shan Life Insurance Co.

"Everyone hopes this is going to be a fire sale as AIG is in a difficult situation," said a local partner of Standard & Poor's.

Continue reading AIG's Taiwan unit draws interest of private equity firms

AIG's Taiwan unit draws interest of private equity firms originally appeared on BloggingStocks on Tue, 30 Jun 2009 09:00:00 EST. Please see our terms for use of feeds.

In what could be the most watched private equity deal of the year, a consortium of buyout firms led by billionaire investor Wilbur L. Ross has set its sights on BankUnited Financial Corp. (NASDAQ: BKUNA), says the Wall Street Journal (subscription required). The consortium includes Carlyle Group and Blackstone Group (NYSE: BX).

Earlier this year, federal regulators declared that the Florida-based lender was "critically undercapitalized" and demanded that it find a buyer or raise new capital. While regulators have traditionally favored other lenders in sales of banks, if Ross's group is successful, it would not only be one of the largest acquisitions in the financial-services sector made by private equity, but could also signal a shift in the government's attitude toward private-equity buyers of banks.

Continue reading BankUnited deal to open the door to private equity acquiring banks?

BankUnited deal to open the door to private equity acquiring banks? originally appeared on BloggingStocks on Mon, 18 May 2009 15:20:00 EST. Please see our terms for use of feeds.

In the middle of 2007, the private equity industry started to crumble as the credit crunch shocked the U.S. financial system. Since then, it's been particularly tough for dealmakers.

Yet, according to a cover story in BusinessWeek, the good days may be here again. In fact, private equity may even help the economy get out of its funk.

And, there is historical precedent. Back in the early 1990s, private equity funds were a key source of restructuring and capital infusions. Interestingly enough, some of the players included the Blackstone Group (NYSE: BX), Carlyle and Apollo (yes, these are now some of the largest funds in the world).

But there's a big difference: Private equity funds now have about $1 trillion in capital to put to work.

Continue reading Will private equity save the world?

Will private equity save the world? originally appeared on BloggingStocks on Wed, 13 May 2009 12:30:00 EST. Please see our terms for use of feeds.

When it comes to private equity firms and unions, the mix is usually explosive. Private equity firms like to fire people, right?

Well, in the depressed global economy, things can get topsy-turvy.

Just take a recent piece in TheHill.com. The co-authors include Carlyle co-founder David M. Rubenstein and United Steelworkers' President Leo W. Gerard.

Yes, they are proposing a solution for the current economic turmoil. Basically, they think it's critical that the focus be on manufacturing.

Continue reading United Steelworkers and Carlyle: Joining forces to save the global economy?

United Steelworkers and Carlyle: Joining forces to save the global economy? originally appeared on BloggingStocks on Mon, 16 Mar 2009 11:45:00 EST. Please see our terms for use of feeds.

This week, some of the top veterans in private equity -- TPG's David Bonderman, Carlyle's David Rubenstein, and KKR's George Roberts -- got together at a conference in Hong Kong. And, all in all, it was fairly depressing (hey, I guess that's what happens when you lose billions and billions of dollars).

Take Bonderman. He thinks the downturn will be protracted, calling it an L-shaped recession (the more common description is a V-shaped recession, which means there is a strong snapback). In fact, he thinks U.S. unemployment will hit 10% or so.

Then again, keep in mind that Bonderman lost about $1.3 billion on his six month investment in Washington Mutual.

Despite all this, Bonderman still has an appetite for investments. For example, he's focusing on the debt securities from hedge funds. Because of massive redemptions, the prices are at distressed levels.

Rubenstein also gave a grim presentation (he thinks the downturn can last several years). But, he is still bullish on some opportunities, especially in Asia. For example, he thinks China offers some compelling valuations and that the country may become more open to outside investments.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

Private equity's top guns remain glum ... but still finding deals originally appeared on BloggingStocks on Sun, 16 Nov 2008 16:40:00 EST. Please see our terms for use of feeds.

About a year ago, the rage in private equity was the so-called megabuyout. It seemed like no company was immune. There was even talk of $100 billion dollar deals.

Of course, the credit crunch ended the megabuyout. In fact, it ended most of the activity for private equity folks.

Yet, according to the co-founder of the Carlyle Group, David Rubenstein, things are perking up [subscription required]. His firm - like other veterans, such as The Blackstone Group (NYSE: BX) - understands market cycles. After all, these players have dealt with variety of credit crunches, such as in 1991-1992, 1998 and 2001-2002.

So, Rubenstein predicts we'll see a pick-up in deals over the next few months. Although, the deals are likely to range from $2 billion to $4 billion -- with less debt. And expect more foreign deals.

Funny enough, Rubenstein seems to be leading the charge with its recently announced a $2.54 billion deal for a majority stake in Booz Allen Hamilton.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Carlyle's Rubenstein sees private equity revival originally appeared on BloggingStocks on Tue, 20 May 2008 10:33:00 EST. Please see our terms for use of feeds.

The Carlyle Group, which is a top private equity firm, got its start by making deals in the government and defense sectors (back in the 1980s). In fact, its co-founders have extensive federal government experience.

Well, the firm is going back to the future. That is, Carlyle announced a $2.54 billion purchase of Booz Allen's government consultancy (for a majority stake). Apparently, both sides have been working on the transaction since the beginning of the year.

The Booz Allen unit has roughly 18,000 employees and has mega clients, such as the NSA, Department of Homeland Security, the World Bank and the Department of Defense. Essentially, the unit had little synergy with the core business of Booz Allen, which is focused on commercial management consulting. But, of course, there should be lots of strategic value for Carlyle's portfolio of businesses.

And, the Booz Allen government unit has been a strong business, especially in light of the rise of global terrorism.

Something else: this is yet another sign that the buyout market is beginning to improve.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Carlyle fortifies a $2.54 billion buyout originally appeared on BloggingStocks on Fri, 16 May 2008 17:31:00 EST. Please see our terms for use of feeds.

• At 8:30 a.m. EDT, February consumer price index will be reported. This closely watched inflation indicator is expected to show inflation rose 0.3% in February, lower that the 0.4% rise in January. Similarly, core CPI, which excludes the more volatile food and energy prices, likely increased by 0.2%, down from January's 0.3%. Any big surprises that may show inflation at the consumer level is much higher than expected (it is already higher than the Fed's "comfort zone") could put a crimp on the Fed's ability to cut interest rates when it meets next Tuesday. The markets could then have a strong reaction as such rate cuts have been widely expected.
• Then, at 10:00 a.m., the March preliminary University of Michigan's consumer confidence index is set to be released. Economists expect the to drop to 69.5 from 70.8, according to Briefing.com.
• At 12:30 p.m., Fed chief Bernanke is to speak on sustainable homeownership in Washington, and investors will likely tune in hoping to hear more about the economy and the growing threat of inflation.

Continue reading Before the bell: Investors await inflation data

Before the bell: Investors await inflation data originally appeared on BloggingStocks on Fri, 14 Mar 2008 07:45:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Leverage fears pervade

Cramer on BloggingStocks: Leverage fears pervade originally appeared on BloggingStocks on Thu, 13 Mar 2008 09:00:00 EST. Please see our terms for use of feeds.

• At 8:30 a.m. EDT, data on weekly jobless claims, February import and export prices and February retail sales will all be released. Retail sales in the U.S. likely cooled in February and increased a paltry 0.2% according to Bloomberg due to rising fuel bills and a slump in hiring, which means claims probably rose. Excluding autos, retails sales are estimates to have risen 0.2% as well. It will also be interesting to see the impact of the dollar on the cost of imported goods. Economists predict a 0.8% rise in February.
• Then, at 10:00 a.m., January business inventories data are due.

Continue reading Before the bell: Futures decline as dollar reaches new lows; Carlyle fund near collapse

Before the bell: Futures decline as dollar reaches new lows; Carlyle fund near collapse originally appeared on BloggingStocks on Thu, 13 Mar 2008 07:40:00 EST. Please see our terms for use of feeds.

It's a rough day for private equity. Carlyle is having a "crisis talk" with its investors because of the implosion of one of its debt funds.

Oh, and the Blackstone Group LP (NYSE: BX) announced its earnings report. There was a net loss of $170 million, which compares to a net gain of $1.18 billion in the same period a year ago. Unfortunately, the firm has little visibility as to when things will improve.

Simply put, Wall Street is not only concerned about the credit crunch - which means that fewer deals will get done - but also the stability of prior transactions. In other words, will some of them unwind and plunge into bankruptcy?

Continue reading New private equity trend: Bankruptcy?

New private equity trend: Bankruptcy? originally appeared on BloggingStocks on Mon, 10 Mar 2008 14:41:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Carlyle's painful default

Cramer on BloggingStocks: Carlyle's painful default originally appeared on BloggingStocks on Thu, 06 Mar 2008 09:22:00 EST. Please see our terms for use of feeds.

One of the pioneers of private equity is The Carlyle Group. The firm has minted billions and is a major force in finance, managing about $76 billion.

But lately things have cooled off. For example, Carlyle's Blue Wave hedge fund is down 9.3% for the year (this is according to a piece on Bloomberg.com). The problem was exposure to pesky mortgage investments.

So it should be no surprise that Carlyle's co-founder, David Rubenstein, is kind of glum. He recently commiserated for the folks at the American Enterprise Institute (there was also coverage in TheDeal.com, which is a paid publication).

Rubenstein thinks that private equity may be facing some tough times, and looks at the parallels of the conglomerates of the 1960s.

It's a pretty apt analogy. After all, as private equity firms get bigger and bigger, they look like bloated entities of disparate business units. In other words, might there be lots of complications in managing all this?

I think so.

Besides, the other big issue is finding liquidity for these private companies. Keep in mind that the IPO market has yet to recover from its boom days of the 1990s. And, M&A appears to be tailing off. Oh, and with the credit crunch, how will private equity funds get financing for deals?

So far, there aren't many clear answers. Or, at least Rubenstein isn't giving us any ideas so far.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Carlyle co-founder discusses private equity's train wreck originally appeared on BloggingStocks on Fri, 30 Nov 2007 10:18:00 EST. Please see our terms for use of feeds.

While driving on LA freeways, I sometimes wonder: how strong are these structures? Were they meant to handle the huge amounts of traffic?

I hope so. But I also realize that throughout the US the infrastructure is getting old and needs replacement.

Well, the private equity folks are seeing opportunity. For example, this week, The Carlyle Group announced its Carlyle Infrastructure Partners fund, which has about $1.15 billion under management.

The geographic focus will be on the US as well as Canada, and Carlyle will look to invest in projects for transportation and water.

Actually, this is kind of a new area for private equity and as a result, Carlyle has hired 14 professionals to manage the fund.

More importantly, the opportunity looks vast. After all, Carlyle projects that the US will need to spend $1 trillion on infrastructure over the next five years.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Carlyle throws a billion at infrastructure originally appeared on BloggingStocks on Wed, 07 Nov 2007 14:57:00 EST. Please see our terms for use of feeds.

Carlyle banks on . . . banking originally appeared on BloggingStocks on Wed, 11 Jul 2007 13:00:00 EST. Please see our terms for use of feeds.

Carlyle checks in and buys Manor Care originally appeared on BloggingStocks on Mon, 02 Jul 2007 15:14:00 EST. Please see our terms for use of feeds.

Bad timing for Carlyle on bond offering originally appeared on BloggingStocks on Thu, 28 Jun 2007 15:45:00 EST. Please see our terms for use of feeds.

Over the past few years, private equity firms have shown an appetite for mega deals -- and even riskier sectors, such as semiconductors.

A prime example is the $17.6 billion buyout of Freescale. The buyers included Blackstone Group, Carlyle, Permira Advisers, and the Texas Pacific Group.

Well, according to a piece in the Wall Street Journal [a paid service], the deal may show the inherent risks of the new approaches to private equity. That is, Freescale has posted weak financials lately. A big problem as been the slowdown from its major customer, Motorola, Inc. (NYSE: MOT).

Of course, the private equity sponsors understood the volatile nature of the semiconductor industry. They also realized that the debt markets were carefree with lending money. As a result, there is about $1.5 billion in Freescale debt that is variable. This means that the company can defer payments (kind of nice, huh?).

This is fine so long as the company eventually comes back. But, history is not so kind to semiconductor companies and there is certainly a good amount of competition. Another nice feature: Freescale can call on $750 million in new loans at any moment.

No doubt, it's good to be in the private equity business. Although, as for those holding debt in these deals, it does look fairly risky.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Private equity's free-wheeling on Freescale originally appeared on BloggingStocks on Fri, 11 May 2007 17:11:00 EST. Please see our terms for use of feeds.

Goldman gets the whale, forming a $20 billion private equity fund originally appeared on BloggingStocks on Mon, 23 Apr 2007 16:15:00 EST. Please see our terms for use of feeds.