Carlyle’s Owners Said to Keep Stakes in Public Offering

Carlyle Group (CG)’s current owners, including the three founders, plan to keep their stakes when the private-equity firm holds its initial public offering, according to a person with knowledge of the IPO.

William Conway, Daniel D’Aniello and David Rubenstein won’t sell any of the shares in the firm they founded in 1987, said the person, who asked not to be identified because the information is private. Other owners, including partners, the California Public Employees Retirement System, and Mubadala Development Co., an investment company controlled by Abu Dhabi, also plan to keep their stakes, the person said.

Randall Whitestone, a spokesman for Washington-based Carlyle, declined to comment on the plans.

Carlyle follows New York-based rivals Blackstone Group LP (BX) and KKR & Co. (KKR) in seeking to become a publicly traded company. In Blackstone’s 2007 IPO, co-founder Peter G. Peterson sold most of his stake to fund his philanthropic efforts and his foundation; his partner, Stephen Schwarzman, sold some shares. Henry Kravis and George Roberts, the cousins who are KKR co-founders and managing partners, have yet to sell stock in their firm, according to KKR’s regulatory filings.

Carlyle, which has contemplated an IPO since at least 2007, signaled in a filing with the U.S. Securities and Exchange Commission this month that it may sell a 10 percent stake in the IPO, saying existing owners would retain 90 percent of a Carlyle holding entity. Carlyle said it intends to use the proceeds of the offering to repay debt as well as for acquisitions and strategic investments.

Carlyle’s owners paid themselves a $398.5 million dividend in December 2010, nine months before the firm filed to go public, by borrowing $500 million from Mubadala. Carlyle repaid the remaining balance to Mubadala last month, refinancing it with new debt, according to a regulatory filing.

The firm’s three founders earned a combined $413 million last year, mainly from distributions.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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