Carlyle Group
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Template:Infobox Company The Carlyle Group is a Washington, D.C. based global private equity investment firm with more than $30 billion of equity capital in 2005. This large pool of money belongs to just 800 individuals from all over the world, making an average contribution of approximately $37.5 million. The firm employs more than 300 investment professionals in 14 countries with multiple offices in North America, Europe and Asia. It boasts of having on its staff, 138 MBAs, 24 JDs and 14 Ph.D/MDs from many of the world’s most prestigious universities. The firm operates four fund families, focusing on leveraged buyouts, venture capital, real estate and high-yield investments.
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Origin
Carlyle was founded in 1987 by Stephen L. Norris, William E. Conway, Jr., Daniel A. D'Aniello, and David M. Rubenstein. Only Norris has since left the Group, at the behest (some say demand) of the other founders. The three remaining founders are reported to collectively own around a 50% interest in the group's general partnership. CalPERS, the California Public Employees Retirement System, is the only institution which owns a stake in the partnership. They own 5.5 percent of Carlyle. The founders named the firm after the upper east side hotel in New York City, "The Carlyle," where they first met to discuss the idea. Carlyle's current chairman is Lou Gerstner, former chairman and CEO of IBM.
Specialization
Carlyle specializes in the following industries: Aerospace & Defense, Automotive, Consumer & Industrial, Energy & Power, Healthcare, Real Estate, Technology & Business Services, Telecommunication & Media, and Transportation. The Group's aerospace and defense investments have been a source of criticism because of the Group's alleged connections to the Middle East. The Carlyle Group's investments are focused on East Asia, Europe and North America. Defense investments represent about 1% of the group's current portfolio — though this translates, for example, into a 33.8% ownership of QinetiQ, the UK's recently privatized defence company — but this is the area for which Carlyle Group is best known.
Controversy
Critics of the Carlyle Group frequently note its connections to various political figures. Some of the sectors and companies it invests in are highly sensitive to political activity, indeed, its actions may be viewed as a form of political arbitrage. This may create conflicts of interest when political decision makers have their own personal wealth linked to such investments. Unlike most private equity firms which are predominantly located in New York, Boston or around San Francisco, Carlyle is the only large private equity firm located in Washington, DC. Corporate headquarters are on Pennsylvania Avenue, midway between the White House and the Capitol building.
Critics will often refer to Carlyle as a private defense contractor, but this is not completely accurate. It is a private equity firm that owns controlling or partial interests in a portfolio of companies, some of which are contractors for the military (though this is the area for which it is most well known). For example, it lobbied for the XM2001 Crusader artillery project, because one of its portfolio companies would be able to share in the contract. Likewise, it has a history of leveraged buyouts in the aerospace and defense industries.
In the book House of Bush, House of Saud, author Craig Unger states that Saudi Arabian interests have given $1.4 billion to firms connected to the Bush family. That figure was quoted by Michael Moore in his film Fahrenheit 9/11. Nearly 90% of the 1.4 billion, about 1.18 billion, refers to Saudi Arabian government contracts awarded to defense contractor BDM in the early to mid 1990s. At that time BDM was owned by the Carlyle Group.
Politicians affiliated with Carlyle
- Alice Albright, daughter of ex-Secretary of State Madeleine Albright
- James Baker III, former United States Secretary of State under George H. W. Bush, Staff member under Ronald Reagan and George W. Bush, Carlyle Senior Counselor
- George H. W. Bush, former U.S. President, Senior Advisor to the Carlyle Asia Advisory Board from April 1998 to October 2003.
- George W. Bush, current U.S. President. Was appointed in 1990 to the Board of Directors of one of Carlyle's first acquisitions, an airline food business called Caterair, which Carlyle eventually sold at a loss. Bush left the board in 1992 to later become Governor of Texas, where he was responsible for appointing several members of the board which controlled the investment of Texas teachers' pension funds. A few years later, the board decided to invest $100m of public money in the Carlyle Group.
- Frank C. Carlucci, former United States Secretary of Defense from 1987 to 1989, chairman emeritus and currently strategic business advisor. Also, former Princeton roommate and wrestling partner of present US Secretary of Defense, Donald Rumsfeld.
- Richard Darman, former Director of the U.S. Office of Management and Budget under George H. W. Bush, Senior Advisor and Managing Director of The Carlyle Group
- William Kennard, Chairman of the U.S. Federal Communications Commission (FCC) under President Bill Clinton, Carlyle's Managing Director in the Telecommunications & Media Group
- Arthur Levitt, Chairman of the U.S. Securities and Exchange Commission (SEC) under President Bill Clinton, Carlyle Senior Advisor
- John Major, former British Prime Minister, Chairman, Carlyle Europe until May 2004, and other posts to the present
- Frank McKenna, former Canadian ambassador to the United States and former member of Carlyle's Canadian advisory board
- Mack McLarty, White House Chief of Staff under President Bill Clinton, President of Kissinger McLarty Associates, Carlyle Senior Advisor
- Anand Panyarachun, former premier of Thailand
- Colin Powell, former United States Secretary of State
- Fidel Ramos, former president of the Philippines, Carlyle Asia Advisor Board Member until the board was disbanded in February 2004
- John W. Snow, United States Secretary of the Treasury, chairman Committee on Foreign Investments in the United States (CFIUS), former CEO of CSX railroad
- Park Tae Joon, former prime minister of South Korea
- Robert Zoellick, former United States Trade Representative and current Deputy Secretary of State
The Saudi Arabian relatives of Osama bin Laden (not Osama bin Laden himself) were also minor investors in Carlyle until October 2001 when the family sold its $2.02 million investment back to the firm in light of the public controversy surrounding the bin Laden family after September 11.
Businesspersons affiliated with Carlyle
- Paul Desmarais, Chairman of the Power Corporation of Canada
- Arthur Levitt, former chairman of the SEC
- Karl Otto Pöhl, former president of the Bundesbank
- George Soros, international investor and liberal political activist
- Luis Téllez Kuenzler, Mexican economist, former Secretary of Energy under Zedillo administration
See also
External links
Articles
- "Greed of the highest order and the worst privatisation since rail" by George Monbiot, on the privatisation of Qinetiq, the British government's defence research service, giving the Carlyle Group around £351m on their 31% share bought in 2002 for £42m. The Guardian, February 14, 2006
- "Bush special envoy embroiled in controversy over Iraq debt" by Naomi Klein, about a deal in Kuwait. The Guardian, October 13, 2004
Criticism
- Making a mint inside "the iron triangle" of defense, government, and industry, Dan Briody, propagandamatrix mirror
- What Did Eisenhower Mean When He Warned of a Military Industrial Complex? Take a Look at the Carlyle Group An interview with Dan Briody
- Why The Carlyle Group is afraid of Stop Carlyle?
- Exposed: The Carlyle Group and VPRO Tegenlicht: Carlyle Group (uses Flash), documentary created by Dutch VPRO TV program Tegenlicht
- De IJzeren Driehoek (Exposed: The Carlyle Group) by VPRO Dutch television High-speed internet connection. Note: The first minute and fortyseven seconds of this program is broadcast in Dutch, The remainder is in English. Translation of the first one minute fortyseven seconds of this program: "The war in Iraq does not seem to be over at all, but in the meantime the rebuilding has already started. This has unleashed fierce competition for contracts, which are mainly awarded to American (ed: U.S.) companies. What is remarkable about these companies is that they have people on their payroll from American politics and the military. Is there a conflict of interest, or is this the new global way of doing business? — [text in the screen at this time reads: 'the iron triangle'] — One of the companies that operates in this manner is the Carlyle Group." On their payroll are people like: George Bush (Sr.), James Baker III and former prime-minister John Major. The Carlyle Group is a private investment bank which doesn't come to the publics attention very often but it is one of the biggest American (ed: U.S.) investors of the defense industry, telecom, property and financial services. What is the Carlyle Group? Who are the people behind the name? And how much power does Carlyle have?"
Further reading
- Dan Briody, The Iron Triangle: Inside the Secret World of the Carlyle Group, John Wiley & Sons, 2003, ISBN 0471281085.de:Carlyle Group
fr:Groupe Carlyle it:Carlyle ja:カーライル・グループ nl:The Carlyle Group