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Posted on 09/21/2007 1:14:52 AM PDT by dennisw
Abu Dhabi pays cut-price £1.35bn for Carlyle stake By David Litterick Last Updated: 3:22am BST 21/09/2007
The Carlyle Group has sold a 7.5pc stake to the investment arm of the Abu Dhabi government in a deal that values the US private equity firm at £20bn.
The investment company Mubadala will pay £1.35bn, including a 10pc liquidity discount, in a deal reminiscent of one by rival buyout firm Blackstone, which sold a $3bn stake to the investment arm of the Chinese government in May.
Mubadala, which will also invest $500m in one of Carlyle's funds, will gain no voting rights.
advertisementBlackstone, currently valued at $28bn, went on to announce its own flotation a month later, but Carlyle founder David Rubenstein has said he has no interest in an IPO in the current market, although he has toyed with the idea of taking Carlyle public.
The deal expands Carlyle's influence in a region that is keen to boost its profile overseas and comes as the private equity industry has been hamstrung by the credit crisis.
Mr Rubenstein said yesterday that the Federal Reserve's dramatic half-point cut in US interest rates could kick-start the moribund industry, but some deals are still likely to fall as a result of the credit crisis.
"I believe the last five years were the five greatest years we could possibly imagine," he told a private equity conference in New York. "Life isn't going to be so easy always and I think the industry has responded reasonably well."
He added: "The Fed decision is obviously helpful. It will be easier to get deals financed. I don't want to make it seem as if it solves all problems but it's a positive step."
He said most announced buyout deals that are still waiting for financing would be done on revised — and more onerous — terms, while some may not get done at all.
"What happened here was a wake-up call to the banks and private equity firms that deals need to be structured in different ways," he said. "It's not a calamity. It's probably healthy."
As part of an attempt to diversify beyond corporate buyouts, Carlyle said this month that it had raised a $3bn fund focused on real-estate investments.
That came after a month in which the value of announced private equity transactions fell to $19.2bn from $87.4bn in July and $131bn in June. So far this year, the industry had carried out a record $785bn of transactions.
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If my understanding is correct, these guys are capitalized to the tune of 15 TRILLION dollars (15 thousand billion).
Amazing, It’s like something out of a Carl Sagan book.
1.5 trillion according to CNBC last night.......... That’s how much free cash Abu Dabi has to spend.
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