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The Carlyle Group, L.P.
The Crusader weapon, developed by United Defense, Carlyle's largest investment in the defense industry, was cancelled in May 2002[11]

Carlyle developed a reputation for acquiring businesses related to the defense industry. In 1992, Carlyle completed the acquisition of the Electronics division of General Dynamics Corporation, renamed GDE Systems, a producer of military electronics systems.[12] Carlyle would sell the business to Tracor in October 1994.[13] Carlyle acquired Magnavox Electronic Systems, the military communications and electronic-warfare systems segment of Magnavox, from Philips Electronics in 1993.[14] Carlyle sold Magnavox for about $370 million to Hughes Aircraft Company in 1995. Carlyle also invested in Vought Aircraft through a partnership with Northrop Grumman.[15] Carlyle's most notable defense industry investment came in October 1997 with its acquisition of United Defense Industries. The $850 million acquisition of United Defense represented Carlyle's largest investment to that point.[11]In the late 1980s, Carlyle raised capital deal-by-deal to pursue leveraged buyout investments, including a failed takeover battle for Chi-Chi's.[7][10] The firm raised its first dedicated buyout fund with $100 million of investor commitments in 1990. In its early years, Carlyle also advised in transactions including, in 1991, a $500 million investment in Citigroup by Prince Al-Waleed bin Talal, a member of the Saudi royal family.[10]

Carlyle developed a reputation for acquiring businesses related to the defense industry. In 1992, Carlyle completed the acquisition of the Electronics division of General Dynamics Corporation, renamed GDE Systems, a producer of military electronics systems.[12] Carlyle would sell the business to Tracor in October 1994.[13] Carlyle acquired Magnavox Electronic Systems, the military communications and electronic-warfare systems segment of Magnavox, from Philips Electronics in 1993.[14] Carlyle sold Magnavox for about $370 million to Hughes Aircraft Company in 1995. Carlyle also invested in Vought Aircraft through a partnership with Northrop Grumman.[15] Carlyle's most notable defense industry investment came in October 1997 with its acquisition of United Defense Industries. The $850 million acquisition of United Defense represented Carlyle's largest investment to that point.[11][16] Carlyle completed an IPO of United Defense on the New York Stock Exchange in December 2001, then sold the rest of the stock in April 2004.[17] In more recent years, Carlyle has invested less in the defense industry.[18]

Carlyle's 2001 investor conference took place on September 11, 2001. In the weeks following the meeting, it was reported that Shafiq bin Laden, a member of the Bin Laden family, had been the "guest of honor", and that they were investors in Carlyle managed funds.[19][20][21][22][23] Later reports confirmed that the Bin Laden family had invested $2 million into Carlyle's $1.3 billion Carlyle Part

Carlyle's 2001 investor conference took place on September 11, 2001. In the weeks following the meeting, it was reported that Shafiq bin Laden, a member of the Bin Laden family, had been the "guest of honor", and that they were investors in Carlyle managed funds.[19][20][21][22][23] Later reports confirmed that the Bin Laden family had invested $2 million into Carlyle's $1.3 billion Carlyle Partners II Fund in 1995, making the family relatively small investors with the firm. However, their overall investment might have been considerably larger, with the $2 million committed in 1995 only being an initial contribution that grew over time.[24] These connections would later be profiled in Michael Moore's Fahrenheit 911. The Bin Laden family liquidated its holdings in Carlyle's funds in October 2001, just after the September 11 attacks, when the connection of their family name to the Carlyle Group's name became impolitic.[25]

Buyouts declined after the collapse of the dot-com bubble in 2000 and 2001. But after the two-stage buyout of Dex Media at the end of 2002 and 2003, large multibillion-dollar U.S. buyouts could once again obtain high-yield debt financing and larger transactions could be completed. Carlyle, together with Welsh, Carson, Anderson & Stowe, led a $7.5 billion buyout of QwestDex, [26] the third-largest corporate buyout since 1989.[27] QwestDex's purchase occurred in two stages: a $2.75 billion acquisition of assets known as Dex Media East in November 2002 and a $4.30 billion acquisition of assets known as Dex Media West in 2003.[28] R. H. Donnelley Corporation acquired Dex Media in 2006.[29] Shortly after Dex Media, other larger buyouts would be completed signaling a resurgence in private equity.

Lou Gerstner, former chairman and CEO of IBM and Nabisco, replaced Frank Carlucci as chairman of Carlyle in January 2003.Lou Gerstner, former chairman and CEO of IBM and Nabisco, replaced Frank Carlucci as chairman of Carlyle in January 2003.[30][31][32] Gerstner would serve in that position through October 2008.[33][34] The hiring of Gerstner, was intended to reduce the perception of Carlyle as a politically dominated firm.[35] At the time, Carlyle, which had been founded 15 years earlier had accumulated $13.9 billion of assets under management and had generated annualized returns for investors of 36%.[32]

Carlyle also announced the $1.6 billion acquisition of Hawaiian Telcom from Verizon in May 2004.[36] Carlyle's investment was immediately challenged when Hawaii regulators delayed the closing of the buyout. The company also suffered billing and customer-service issues as it had to recreate its back-office systems. Hawaiian Telcom ultimately filed for bankruptcy in December 2008, costing Carlyle the $425 million it had invested in the company.[37]

As the activity of the large private equity firms increased in the mid-2000s, Carlyle kept pace with such competitors as Kohlberg Kravis Roberts, Blackstone Group, and TPG Capital. In 2005, Carlyle, together with Clayton Dubilier & Rice and Merrill Lynch completed the $15.0 billion leveraged buyout of The Hertz Corporation, the largest car rental agency from Ford.[38][39]

The following year, in August 2006, Carlyle and its Riverstone Holdings affiliate partnered with Goldman Sachs Capital Partners in the $27.5 billion (including assumed debt) acquisition of Kinder Morgan, one of the largest pipeline operators in the US. The buyout was backed by Richard Kinder, the company's co-founder and a former president of Enron.[40]

In September 2006, Carlyle led a consortium, comprising Blackstone Group, Permira and TPG Capital, in

The following year, in August 2006, Carlyle and its Riverstone Holdings affiliate partnered with Goldman Sachs Capital Partners in the $27.5 billion (including assumed debt) acquisition of Kinder Morgan, one of the largest pipeline operators in the US. The buyout was backed by Richard Kinder, the company's co-founder and a former president of Enron.[40]

In September 2006, Carlyle led a consortium, comprising Blackstone Group, Permira and TPG Capital, in the $17.6 billion takeover of Freescale Semiconductor. At the time of its announcement, Freescale would be the largest leveraged buyout of a technology company ever, surpassing the 2005 buyout of SunGard. The buyers were forced to pay an extra $800 million because KKR made a last-minute bid as the original deal was about to be signed. Shortly after the deal closed in late 2006, cell phone sales at Motorola Corp., Freescale's former corporate parent and a major customer, began dropping sharply. In addition, in the recession of 2008–2009, Freescale's chip sales to automakers fell off, and the company came under great financial strain.[41][42]

Earlier that year, in January 2006, Carlyle together with Blackstone Group, AlpInvest Partners, Hellman & Friedman, Kohlberg Kravis Roberts and Thomas H. Lee Partners acquired Nielsen Company, the global information and media company formerly known as VNU in an $8.9 billion buyout.[43][44][45] Also in 2006, Carlyle acquired Oriental Trading Company which ultimately declared bankruptcy in August 2010[46] as well as Forba Dental Management, the owner of Small Smiles Dental Centers, the largest US chain of dental clinics for children.[47]

In 2011, The Carlyle Group- Carlyle Asia Growth Partners IV and Yunfeng Capital[48][49][50] acquired an approximately 80% stake[51][52][53][54] in GDC Technology Limited, a digital cinema solutions provider.

2020

On 2 June 2

On 2 June 2020, The Carlyle Group and T&D Holdings reported that they had concluded their purchase of a 76.6% stake in Fortitude Group Holdings, the latter of which comprises Fortitude Re, and American International Company Inc.[55] Also in June 2020, Unison had been purchased by the Carlyle Group and Unison management strategic investment company.[56]

In September 2020, The Carlyle Group acquired a majority stake in Minneapolis-based sanitizing machine maker Victory Innovations. Terms of the deal were not disclosed.[57]

[57]

For the first 25 years of its existence, Carlyle operated as a private partnership controlled by its investment partners. In 2001, the California Public Employees' Retirement System (CalPERS), which had been an investor in Carlyle managed funds since 1996, acquired a 5.5% holding in Carlyle's management company for $175 million.[58] The investment was valued at about $1 billion by 2007 at the height of the 2000s buyout boom.[59]

In September 2007, Mubadala Development Company, an investment vehicle for the government of Abu Dhabi of the Mubadala Development Company, an investment vehicle for the government of Abu Dhabi of the United Arab Emirates, purchased a 7.5% stake for $1.35 billion.[59][60]

In February 2008, California legislators targeted Carlyle and Mubadala, proposing a bill that would have barred CalPERS from investing money "with private-equity firms that are partly owned by countries with poor records on human rights." The bill, which was intended to draw attention to the connection between Carlyle and Mubadala Development, was later withdrawn.[61]

In May 2012, Carlyle completed an initial public offering of the company, listing under the symbol CG on the NASDAQ. The firm, which at the time managed about $147 billion of assets, raised $671 million in the offering. Following the IPO, Carlyle's three remaining founding partners, Rubenstein, D'Aniello and Conway retained the position as the company's largest shareholders.[62]

In June 2017, Carlyle took its non-traded BDC, TCG BDC, Inc., public in the first business development company IPO since 2014.[63][64]

Carlyle has been actively expanding its investment activities and assets under management through a series of acquisitions and joint-ventures.[65]

Carlyle Capital Corporation

In March

In March 2008, Carlyle Capital Corporation – established in August 2006[66] for the purpose of making investments in U.S. mortgage-backed securities – defaulted on about $16.6 billion of debt as the global credit crunch brought about by the subprime mortgage crisis worsened for leveraged investors. The Guernsey-based affiliate of Carlyle was very heavily leveraged, up to 32 times by some accounts, and it expected its creditors to seize its remaining assets.[67] Tremors in the mortgage markets induced several of Carlyle's 13 lenders to make margin calls or to declare Carlyle in default on its loans.[68] In response to the forced liquidation of mortgage-backed assets caused by the Carlyle margin calls and other similar developments in credit markets, on March 11, 2008, the Federal Reserve gave Wall Street's primary dealers the right to post mortgaged-back securities as collateral for loans of up to $200 billion in higher-grade, U.S. government-backed securities.[69]

On March 12, 2008, BBC News Online reported that "instead of underpinning th

e mortgage-backed securities market, it seems to have had the opposite effect, giving lenders an opportunity to dump the risky asset" and that Carlyle Capital Corp. "will collapse if, as expected, its lenders seize its

On March 12, 2008, BBC News Online reported that "instead of underpinning th

e mortgage-backed securities market, it seems to have had the opposite effect, giving lenders an opportunity to dump the risky asset" and that Carlyle Capital Corp. "will collapse if, as expected, its lenders seize its remaining assets."[70] On March 16, 2008, Carlyle Capital announced that its Class A Shareholders had voted unanimously in favor of the Corporation filing a petition under Part XVI, Sec. 96, of the Companies Law (1994) of Guernsey[71] for a "compulsory winding up proceeding" to permit all its remaining assets to be liquidated by a court-appointed liquidator.[72]

The losses to the Carlyle Group due to the collapse of Carlyle Capital are reported to be "minimal from a financial standpoint".[73]

In September 2017 the court ruled that Carlyle had no liability in the lawsuit.[74]

Carlyle has been profiled in two notable documentaries: Michael Moore's Fahrenheit 9/11 and William Karel's The World According to Bush.

In Fahrenheit 9/11, Moore makes nine allegations concerning the Carlyle Group.[75] Moore focused on Carlyle's connections with George H. W. Bush and his Secretary of State In Fahrenheit 9/11, Moore makes nine allegations concerning the Carlyle Group.[75] Moore focused on Carlyle's connections with George H. W. Bush and his Secretary of State James Baker, both of whom had at times served as advisers to the firm. The movie quotes author Dan Briody, who claimed that the Carlyle Group "gained" from the September 11 attacks because it owned military contractor United Defense.[18] A Carlyle spokesman noted in 2003 that its 7% interest in defense industries was far less than several other private equity firms.[76]

In The World According to Bush, William Karel interviewed Frank Carlucci to discuss the presence of Shafiq bin Laden, Osama bin Laden's estranged brother, at Carlyle's annual investor conference while the September 11 attacks were occurring.[20][21][22]