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MGMT 495 Summer 2011: Kelly Bossolt Marta Kovorotna Sarah Smith

MGMT 495 Summer 2011: Kelly Bossolt Marta Kovorotna Sarah Smith.

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MGMT 495 Summer 2011: Kelly Bossolt Marta Kovorotna Sarah Smith

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  1. MGMT 495 Summer 2011: Kelly Bossolt Marta Kovorotna Sarah Smith
  2. “We try to mix our investment culture with third-party objective management experience and local knowledge. We have done this across all our funds. We’re never satisfied that we’ve built the best model. We constantly try to morph the catcher’s mitt to the pitch that’s being thrown.” DinielD’Aniello, Carlyle co-funder Investors chose funds, Carlyle decides where to invest the fund’s money Carlyle Group:
  3. Financial Analysis External Analysis Market Entry Rivals & Substitutes Investors & Activities International Entry Internal Analysis Early Years2 2008 Structure Resources Capabilities Executive summary
  4. Relatively Easy to Enter Need expertise Need cash flow Need investors Based on Trust & Performance Carlyle was founded in 1987 external analysis: entry
  5. The Blackstone Group, KKR, TPG Mostly NY based Companies Focused on the biggest acquisitions Carlyle focused on small & mid-market deals Hard to substitute Different strategy, and ideas Easily imitated with the right expertise External analysis: rivals & Substitutes
  6. Investors Public & Private Institutions High net worth Individuals Investment Activities Very Conservative Only invest in places with expertise Always get multiple approvals External analysis: investors & Activities
  7. Europe – 1998 Smooth Entry Asia – 1999 Hong Kong & Seoul Rocky Beginnings Strategy – Buyout, they wanted Growth Capital External analysis: INternational
  8. Washington, D.C. location Extensive government contacts Identified investment opportunities overlooked by Wall Street Heavy investments in Defense industry BDM Hired people with top public sector experience James Baker, former Secretary of State Arthur Levitt, former SEC Commissioner Internal Analysis: Early Years
  9. September 11, 2001 Defense industry caught a bad rep. Carlyle pulled back Began buying distressed companies Titanium-component maker Stellex After reviving them, Carlyle sold making 6.3 times it’s invested capital Change in team Strong business and leadership skills, opposed to those with strong political connections Internal Analysis: Transitions
  10. Able to sustain growth through the financial crisis Four main investment activities Buyout Specialized by industry: “Industry trumps everything-it trumps product type & geography” Leveraged Finance CDOs Real Estate Commercial & residential Growth Capital Assisted companies in getting started and growing quickly Internal Analysis: 2008
  11. Employees belonged to 1 of 3 groups Deal makers Investor relations & fundraisers Investor Service Each of the 48 funds operates as its own regulatory and legal entity 2008 Decentralized decision making through 5 investment sectors Internal Analysis: Organizational Structure
  12. “Good investment professionals don’t grow on trees” “We want people to help us build a cannon” not here for personal gain” 2000 HR was established Annual reviews, employee retreats, 360 degree evaluation Take time to mentor your team “Do good deals and everything else will take care of itself.” Talent must have strong entrepreneurial orientation to make and close deals Internal Analysis: Talent & Culture
  13. Shared information and expertise across funds, industries and geographies One Carlyle approach Had a knack for reviving distressed companies some of which were in distressed industries BDM, Forged Metals & Firth Rixon, Dex Experts in every industry Known to be Risk-Averse Resilient and diversified across asset classes Succeeded by doing things slightly different from others Global Financial Services ( Not traditional among PE firms) Internal Analysis: Capabilities
  14. Their team: 203 MBAs 34 JDs 11 Ph.Ds/M.Ds 33 offices in 22 different countries Internationalize through localization Regional offices opposed to only one per country “We don’t parachute Americans in.” Important to hire foreign national that are deeply rooted in the local business culture Internal Analysis: Resources
  15. Be cautious within the financial services sector Probably not traditional for a good reason Too complex and far too risky Example: Boston Private Financial Holdings not doing well Recommendations:
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