Carlyle bosses admit last year was humbling

BOSSES at Carlyle, the world’s second-biggest private equity house, said 2008 was a “humbling experience” and warned operating conditions for portfolio companies will remain tough.

In an annual report to investors, the group’s three managing directors William Conway, Daniel D’Aniello and David Rubenstein said their “world changed dramatically” after several “spectacular” years of runaway growth ended in the credit crunch.

“Transactions will be fewer and smaller. More equity will be required and debt terms will be less favourable. And hold periods will increase while returns will decrease,” the firm said.

They said since the start of 2008 year three of Carlyle’s buyout portfolio companies filed for bankruptcy protection – German car parts maker Edscha, oil and gas logistics firm SemGroup and Hawaiian Telecom.

They did not provide details on how much the failures will cost.

But the trio of managing directors said they were able to deploy $12.6bn in equity in 2008.

“We must deploy our resources to protect the investments we have already made while seeking ways to profit from the extraordinary opportunities that exist,” they added.