- Term Papers and Free Essays

Carlyle Group

Essay by   •  September 17, 2010  •  1,594 Words (7 Pages)  •  1,719 Views

Essay Preview: Carlyle Group

Report this essay
Page 1 of 7

he Carlyle Group is a Washington, D.C. based private investment firm. It is a private equity firm that employs numerous high-ranking government officials with ties to both political parties. A private equity is a form of investing in which companies such as Carlyle invest in private companies and real estate. The Group was established in 1987 pioneering investing in the defense and national security markets. It is now one of the world's largest private equity firms with more than $18.9 billion under management.

William E. Conway, Jr., Daniel A. D'Aniello, and David M. Rubenstein founded Carlyle. They named the firm after the Upper East Side hotel in New York City, "The Carlyle". The current chairman is Lou Gerstner, former chairman and CEO of IBM. The firm employs more than 300 investment professionals in 14 countries. The firm has multiple offices in North America, Europe, and Asia. It operates four investment disciplines, which include management-led buyouts, real estate, leveraged finance, and venture capital. Carlyle specializes in a list of industries: Aerospace & Defense, Automotive, Customer & Industrial, Energy & Power, Healthcare, Real Estate, Technology & Business Services, Telecom & Media, and Transportation. Unlike other well-known defense firms like Lockheed Martin and Boeing Co., Carlyle itself is not a manufacturer. It manages investments. 60 percent of Carlyle's defense business is brought in by United Defense Inc., which manufactures combat vehicles, artillery, naval guns, missile launchers, and precision munitions.

The Carlyle Group was ranked 9th largest Pentagon contractor from 1998 to 2003. The Company's "edge is its ability to leverage local insight of its investment professionals, collaborating across the firm's investment disciplines from deal sourcing and due diligence through portfolio company development."

The Carlyle Group plays a significant role in the defense sector of the Iraqi war. Government divisions such as the Pentagon outsource companies by using them as contractors or financiers. The Carlyle Group plays a part in both of these dealings.

As a private equity firm, the company facilitates investments in the defense and national security markets. They help to service the pentagon financially, and ranked 9th according to cost of defense contracts (many billions of dollars); as high as those companies who actually manufacture defense mechanisms, such as Boeing and Lockheed Martin. The Carlyle Group has managed investments from over 600 persons and companies in at least 55 different countries and is helping to make money for these investors. Investors have earned sums totaling $18.4 billion. A majority of the identities of these investors has never been disclosed to the Securities and Exchange Commission or any other government sector.

In addition to funding for the Pentagon, the Carlyle Group also aids in the Pentagon's non-financial defense interests. They help companies who specialize in defense to obtain contracts with the Pentagon. United Defense was one of Carlyle's largest and most profitable units.

The Carlyle Group itself has no defense contracts with the Pentagon, and offers no services to the US government. However the companies that it has owned or controlled have done business with the pentagon worth billions of dollars.

The Carlyle Group acquires controlling interests in underperforming defense contractors. The company carries in new management, and team arrangement, and basically restores these companies. Primarily because of the restoration, the companies are able to acquire huge Pentagon contracts. Then, Carlyle sells these contractors to investors for a hefty profit.

Much of the Carlyle Group's investments are made with the expertise of former high-ranking government officials; those of which the company courted and hired at almost the time of their inception in 1987. Much of these investments are due in part towards the leadership of former Defense Secretary, Frank Carlucci. James Baker, former Secretary of State, also supposedly lead pursuit of defense deals.

When analyzing the Carlyle Group, especially its members, it is astonishing to find so many links between them and the US government. As the main investors, former secretaries of defense, secretaries of state, as well as the former president George H. Bush, it isn't surprising that the current government is very interlocked with the interests of the Carlyle Group. As heavy investors of companies benefiting from US waged wars on terror whether it is in Iraq or Afghanistan, they are being assured of their profits by current government policies. And in return, how will President George W. Bush personally make millions (if not billions) from the War on Terror and Iraq? The old fashioned way, he'll inherit it. By acting in the interests of those who've invested millions in the military, he has assured himself rewards just as promising. Therefore bringing up the possible theory of whether our current military strategy is really helping everyone including the rest of the world, or only those who hold stock in the war supply producing companies. We see clear evidence of a revolving door where the predecessors to our current government, have laid a foundation so thick causing our current legislators to sell their legislative abilities. When the demand and price willing to pay for certain desired conditions is as high as with the Carlyle Group, whose members live on Pennsylvania Ave. between the White House and the Capitol Building, then current military policy can easily be sold to those desiring it. And those desiring it clearly got to that point through a revolving door or basically high places in Washington



Download as:   txt (9.4 Kb)   pdf (113.3 Kb)   docx (12.1 Kb)  
Continue for 6 more pages »
Only available on