The Banking and Strategy Initiative

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The new Private Equity Funding taps: Carlyle and Oaktree Capital

Carlyle Group Historical Logo

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Carlyle selected leads for its IPO Friday as J P Morgan gets another chance to pip Goldman Sachs with a lead left for the issue.

The lead left position means J P Morgan gets the biggest share of the underwriting and the fees as Carlyle follows Blackstone and KKR into the public fold. It is joined there by Apollo and Fortress Investment Group that have also recently gone public. The Abu Dhabi government had also bought an earlier stake in the Company in 2007 when it was valued at $20 bln. It’s recent investment Florida based Bank United has also completed a merger transaction as PE firms look to breakout from their drought run since 2006 and plan not only exits but public funds and issue sizes that compensate for a larger wider opportunity set. Investing globally has become a global fashion and is more than just a pioneer’s edge. Another Carlyle investment strategy of investing and auctioning ready luxury flats seems to be headed to better climes sooner than later even as the larger housing markets define oversupply and stagnation.

Carlyle has recently, in fact last week, opened in South Africa even as Indian firms start vying with China for FDI ou nvestment Safaris in Africa’s $3 tln consumer economy

While Carlyle looks to raise a $1 bln from the issue and May had returned back many, Oaktree is looking for a more benign amount a $100 mln. Carlyle’s own IPO from Freescale was one of those that faced tough times trying to successfully close the issue, though Carlyle or the other 3 PE firms that own Freescale were not selling down their shares either. Others like HCA and Nielsen had a good market acceptance rate ( Cover ratio of 3 + ) but they were Q1 stories. New issuers in June continue to be cautious as Sprint Airlines opens at a lower price this week. However those facing trouble seemed to have been mostly Technology stories or long range financing stories in infrastructure

Howard Mark’s Oaktree is one of the few LA firms listing on the Big Board. Its assets had dropped in value to a low $50 bln in 2008 and now are valued at over $80 bln. Thus the firm itself could be valued between $15-$45 bln based on incomes from contracts and the proportion of actively growing and liquid investments



Kohlberg Kravis Roberts & Co.

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