February 26, 2021

DealBook: Carlyle Files for an I.P.O.

David Rubenstein, co-founder of the Carlyle Group.Jonathan Alcorn/Bloomberg NewsDavid Rubenstein, co-founder of the Carlyle Group.

The Carlyle Group officially wants to join the exclusive club of publicly traded private equity giants.

Carlyle filed for an initial public offering on Tuesday, a long-awaited development that will finally shed light on the investment firm’s business.

The securities filing listed a provisional fund-raising target of $100 million, which is likely to change over time. That number is used to calculate the registration fee.

Founded in 1987, the Washington-based firm manages $153 billion in assets across 86 funds and 49 fund of funds, according to the filing. It employs more than 1,100.

The firm reported $2.8 billion in revenue last year and $1.5 billion in net income attributable to Carlyle. Using economic net income, a pro forma accounting figure preferred by private equity firms, Carlyle earned just over $1 billion.

By comparison, the Blackstone Group, one of Carlyle’s biggest competitors, reported $3.1 billion in revenue and $485.5 million in economic net income last year.

Like other private equity firms, Carlyle has benefited from improving market conditions and low interest rates. The company reported a 172 percent increase in revenue for the first six months of the year, to $447.2 million.

Its revenue from management fees has grown 16 percent thanks to several fund acquisitions, while its performance fees have jumped an astounding 971 percent because the value of its investments has improved.

The firm also confirmed that it has reorganized its corporate structure, to reflect its transition from a private partnership to a public company. Its three cofounders will remain at the top: Daniel A. D’Aniello will become the firm’s chairman, while David M. Rubenstein and William E. Conway Jr. will become co-chief executives.

Carlyle’s public offering will also allow the firm’s current stakeholders to cash out, including its cofounders and senior executives. Mubadala, an investment arm of Abu Dhabi, purchased a 7.5 percent stake in 2007 and made an additional $500 million investment late last year. And the giant California pension fund Calpers has owned at least a 5.5 percent stake in the firm for several years.

The firm’s offering will be led by JPMorgan Chase, Citigroup and Credit Suisse.

Article source: http://feeds.nytimes.com/click.phdo?i=2580fddbc2771e47bd61551020be0842

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