Carlyle sells stake to Abu Dhabi government fund

The US alternative assets group has sold a further 7.5 percent stake in itself to a strategic investor, valuing David Rubenstein’s firm at $20 billion. It sold 5.5 percent to CalPERS in 2000.

The Carlyle Group is selling a 7.5 percent stake to an affiliate of Mubadala, the Abu Dhabi Government strategic investment and development company, for $1.35 billion in cash.

David Rubenstein

Carlyle is the latest private equity firm in a spate to sell a share in its management company. The California Public Employees’ Retirement System purchased a stake in Apollo Management Group in July for $600 million (€434 million). In May, The Blackstone Group sold a 10 percent, $3 billion stake to the Chinese state before its June initial public offering, and Fortress Investment Group sold a 15 percent, $888 million stake to Tokyo-based investment bank Nomura Holdings ahead of its February initial public offering.

Carlyle’s deal represents a 10 percent liquidity discount to the parties’ agreed $20 billion firm valuation. The minority investment includes no associated voting rights and is subject to value-related protective rights.
Mubadala also committed $500 million to an investment fund managed by Carlyle. The transaction is expected to close in October.

Mubadala joins the California Public Employees’ Retirement System (CalPERS) as a strategic investor in Carlyle. CalPERS purchased a 5.5 percent stake in Carlyle in 2000.

Carlyle co-founder David Rubenstein said in a statement, “These resources, like the earlier investment by CalPERS, will add to Carlyle’s capital base, strategically expand our business and be used for additional investments.” Rubenstein recently ruled out following rivals Blackstone and KKR onto the public markets in 2007 until the full impact of the global credit crunch becomes clear.

Carlyle has 900 employees operating in 21 countries managing $76 billion in capital committed to 55 funds. It closed its latest fund, a European vehicle on $5.35 billion, taking its available firepower to $32 billion.

Since 1987, Carlyle has invested $34 billion in 686 transactions, returned $32.5 billion in equity and gain to its investors and has $30 billion in remaining value in its investments.

Goldman Sachs advised Mubadala on the transaction and Citigroup Global Markets advised Carlyle on the transaction.