Amid the hoopla of The Blackstone Group’s S-1 filing back in early 2007 I don’t recall too many reporters focusing on investment returns. Through year-end 2006, the firm had generated on its corporate private equity portfolio a net IRR to investors of 22.8 percent per year for the previous 19 years. That’s simply an incredible performance, and suggests that their funds consistently ranked among the top 25 percent of their peers. (Everyone claims to be top-quartile, but Blackstone clearly has been.)
Over four years and one financial crisis later, anticipation is building for an IPO filing from The Carlyle Group, the Washington DC-based rival of Blackstone. I’m guessing their returns have been equally strong, after factoring in the boom-and-bust years. But why wait for the S-1 to take the measure of the firm’s track record? (UPDATE: You no longer have to wait for top-line returns. Get the S-1 here, which shows Carlyle Group generated a gross IRR on its corporate private equity portfolio of 27 percent, and a net IRR of 19 percent, through June 30. Read on for returns of specific funds, which you won’t find in the S-1.)
The California Public Employees’ Retirement System, which took a 5.5 percent stake in Carlyle Group a decade ago, has been investing with the firm since at least 1996. That year the pension fund took a flyer on Carlyle Partners II LP and, thanks to its 25.3% net IRR, watched an $80 million investment turn into more than $200 million between cash out and remaining value.
All told as of year-end CalPERS had invested an estimated $1.2 billion through 15 Carlyle funds whose results the pension fund considered mature enough to be meaningful (including two Carlyle/Riverstone energy funds, and not counting any funds sold), based on our analysis of CalPERS return data. Those 15, vintages years 1996 to 2005, have generated more than $2.2 billion in value, between cash back and remaining value. The average net IRR for the pack is 21.2% (not weighted for fund size) and range from -0.6% for the 2001 Carlyle Venture Partners II LP to 55.8% for the 2003 Carlyle/Riverstone Global Energy & Power II. The slideshow below takes you through the 15, in order of performance, worst to best. All data comes from CalPERS.
David M. Toll is editor-in-charge of Buyouts Magazine. Follow him on Twitter @davidmtoll. Follow @Buyouts.
[slideshow]
[slide title=”No. 15 – Carlyle Venture Partners II LP”]
Vintage Year: 2001
Net IRR: -0.6%
Investment Multiple: 1.0x
Capital Invested:$49.9M
Cash Out + Remaining Value: $48.6M
[slide title=”No. 14 – Carlyle Partners IV LP”]
Vintage Year: 2005
Net IRR: 8.7%
Investment Multiple: 1.4x
Capital Invested:$279.8M
Cash Out + Remaining Value: $391.4M
[slide title=”No. 13 – Carlyle High Yield Partners IV LP”]
Vintage Year: 2002
Net IRR: 13.3%
Investment Multiple: 1.5x
Capital Invested:$5.0M
Cash Out + Remaining Value: $7.5M
[slide title=”No. 12 – Carlyle/Riverstone Global Energy & Power III”]
Vintage Year: 2005
Net IRR: 15.3%
Investment Multiple: 1.6x
Capital Invested:$232.2M
Cash Out + Remaining Value: $372.3M
[slide title=”No. 11 – Carlyle Europe Realty Partners LP”]
Vintage Year: 2002
Net IRR: 16.1%
Investment Multiple: 1.8x
Capital Invested:$30.9M
Cash Out + Remaining Value: $56.0M
[slide title=”No. 10 – Carlyle Asia Venture Partners II LP”]
Vintage Year: 2001
Net IRR: 17.1%
Investment Multiple: 1.9x
Capital Invested:$37.3M
Cash Out + Remaining Value: $70.1M
[slide title=”No. 9 – Carlyle Mexico Partners LP”]
Vintage Year: 2005
Net IRR: 17.7%
Investment Multiple: 1.4x
Capital Invested:$21.2M
Cash Out + Remaining Value: $29.9M
[slide title=”No. 8 – Carlyle Asia Partners (PV II) LP”]
Vintage Year: 2000
Net IRR: 19.4%
Investment Multiple: 2.7x
Capital Invested:$77.0M
Cash Out + Remaining Value: $211.0M
[slide title=”No. 7 – Carlyle Europe Partners II LP”]
Vintage Year: 2003
Net IRR: 22.2%
Investment Multiple: 1.6x
Capital Invested:$63.7M
Cash Out + Remaining Value: $103.0M
[slide title=”No. 6 – Carlyle Partners III LP”]
Vintage Year: 2000
Net IRR: 22.6%
Investment Multiple: 2.3x
Capital Invested:$135.4M
Cash Out + Remaining Value: $317.7M
[slide title=”No. 5 – Carlyle Strategic Partners I LP”]
Vintage Year: 2004
Net IRR: 22.7%
Investment Multiple: 1.8x
Capital Invested:$33.9M
Cash Out + Remaining Value: $59.8M
[slide title=”No. 4 – Carlyle Partners II LP”]
Vintage Year:1996
Net IRR: 25.3%
Investment Multiple: 2.5%
Capital Invested:$80.0M
Cash Out + Remaining Value: $203.0M
[slide title=”No. 3 – Carlyle Realty Qualified Partners III LP “]
Vintage Year: 2001
Net IRR: 28.5%
Investment Multiple: 2.0x
Capital Invested:$46.5M
Cash Out + Remaining Value: $94.2M
[slide title=”No. 2 – Carlyle Japan Partners I LP”]
Vintage Year: 2001
Net IRR: 34.0%
Investment Multiple: 2.1x
Capital Invested:$24.7M
Cash Out + Remaining Value: $51.8M
[slide title=”No. 1 – Carlyle/Riverstone Global Energy & Power II”]
Vintage Year: 2003
Net IRR: 55.8%
Investment Multiple: 2.6x
Capital Invested:$69.9M
Cash Out + Remaining Value: $184.9M
[/slideshow]
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