Carlyle Group, the buyout firm that on Wednesday unveiled another major investment in the banking sector, distributed more than $6.4 billion to investors in the first quarter.
The distribution, which marks the most in the company's 24-year history, was disclosed by Carlyle in an April 15 letter to investors that did not say how profitable the investments were. The value of the Washington firm's private-equity holdings rose 10% in the quarter and 46% in 12 months, according to the letter.
Carlyle said it sees more opportunities to put money to work, a view questioned this week by Blackstone Group LP Chairman Stephen Schwarzman, who said rising prices are making it more difficult for his firm to find profitable deals. Carlyle, ranked second by assets under management, committed or invested $4.5 billion in 12 private-equity deals last quarter, according to the letter.
"Now is an opportune time to put capital to work," founders William E. Conway, Daniel A. D'Aniello and David M. Rubenstein said in the letter. The company has "endeavored to find attractive investment opportunities, which we believe will ultimately result in superior absolute investment returns."
The Standard & Poor's 500 Index returned 5.9% including dividends for the quarter and 16% in 12 months.
Leveraged buyout firms raised about $19.5 billion from initial public offerings during the first three months of this year, more than half the total they amassed last year, according to data compiled by Bloomberg and Preqin Ltd. The shares of nine buyout-backed IPOs last quarter gained an average of 11% in the first month of trading.
Both Carlyle and Blackstone have diversified beyond leveraged buyouts to create a more stable revenue stream and appeal to outside shareholders. Blackstone, of New York, went public in 2007, just before the credit crisis brought dealmaking to a halt. Carlyle is considering a public offering as early as this year.
The firm agreed in January to buy AlpInvest Partners NV, a Dutch money manager that oversees about $44 billion in private-equity funds, to expand asset management in Europe. In December, it bought 55% of the hedge fund Claren Road Asset Management, which had "positive" performance in the first quarter, according to the letter.
On Wednesday, Carlyle said it would invest about $78 million to facilitate FNB United Corp.'s planned acquisition of Bank of Granite Corp., combining two North Carolina banking companies (See
Carlyle's founders said while they agreed with most guidelines from the Institutional Limited Partners Association, which seeks to give fund clients more rights while reducing fees, those rules should not be a "set of rigid requirements." The guidelines, which were updated in January and incorporate feedback from managers, garnered support from Carlyle competitors including KKR & Co., of New York, which endorsed the document in March.
"Certain issues are better determined by GPs and LPs based upon the circumstances unique to a particular firm and/or fund," the founders said, referring to general partners and limited partners.
