When former JPMorgan Chase & Co. executive Mike Cavanagh arrives at Carlyle Group LP this summer, he’ll be asked to expand a firm that’s fallen behind rivals even as it delivers some of the best returns in private equity.
Carlyle Group, the world’s second- largest private-equity firm, was sued by liquidators of the buyout company’s defunct mortgage bond fund, saying executives lost $945 million in overly risky investments.
Private equity, an investing trade plied by 4,500 firms with $3 trillion in assets, is bracing for a shakeout that’s been brewing since the collapse of credit markets choked off a record leveraged-buyout binge.
Galleon Group LLC co-founder Raj Rajaratnam said the punishment sought by the government for his insider-trading convictions is “grotesquely severe” and should be rejected by the court. The U.S. said a long prison sentence is warranted.
Carlyle Group, pressing ahead with plans for an initial public offering, is meeting privately with analysts to convince them the buyout firm is worth at least as much as its most richly valued competitor, Blackstone Group LP.
Carlyle Group LP, in a transaction nine months before it filed to go public, saddled itself with debt to pay owners including William Conway, Daniel D’Aniello and David Rubenstein a $398.5 million tax-deferred dividend.
Seven men, including fund managers and analysts, were charged by the U.S. with forming a “criminal club” of friends and co-workers who reaped almost $62 million from insider trading in Dell Inc. shares.
Carlyle Group LP’s plan to protect itself from class-action lawsuits may set a precedent that undermines shareholder rights and encourages more companies to follow suit, lawyers, investors and government officials said.