Reuters: Private Equity: UPDATE 1-Carlyle Group may sell 10 pct stake in IPO

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UPDATE 1-Carlyle Group may sell 10 pct stake in IPO Apr 3rd 2012, 16:34 Tue Apr 3, 2012 12:34pm EDT * Says existing owners may be left with 90 pct in one holding co. * Such sale would be small compared to other private equity firm IPOs By Greg Roumeliotis April 3 (Reuters) - Private equity firm Carlyle Group LP, with about $147 billion in assets under management, may sell a 10 percent stake in its upcoming initial public offering, according to a regulatory filing published on Tuesday. William Conway, Daniel D'Aniello and David Rubenstein, who founded Carlyle in 1987, have registered an IPO that is expected as early as April and have recruited 21 banks to help market it to investors. The founders will not pocket any IPO cash directly. Instead, proceeds will be used to pay down debt and finance operational needs, acquisitions and new fund commitments, the filing said. In the first indication of its intentions on the size of the sale, Carlyle said it assumed its existing owners would own about 90 percent of one of Carlyle's holding entities after the sale, which on a pro-rata basis would result in 10 percent of the overall holdings being sold. The offering is for a nominal amount of $100 million, but that does not necessarily reflect the size of the sale or the firm's valuation. Were Carlyle to proceed with a 10 percent stake divestment, the sale would be proportionally smaller than those of its peers. Blackstone Group LP raised about $7 billion by selling a 24 percent stake in its IPO in 2007, including a 9.9 percent stake to China's state investment company. KKR & Co LP transferred its listing from Amsterdam to New York in 2010. About 30 percent of its shares were listed in New York. "Carlyle is probably trying to use the small stake sale to test the waters, they may very well increase the size," said Scott Sweet, managing partner at IPO Boutique. "Psychologically, it sounds better and seems as if they want to keep more control of the company. They're likely to do a multitude of secondary offerings after." In 2007, Abu Dhabi state investment firm Mubadala bought a 7.5 percent stake in Carlyle for $1.35 billion. CalPERS, the California pension fund for public employees and one of private equity's largest investors, took a 5.5 percent stake in 2000. Link this Share this Digg this Email Reprints

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