Carlyle relies on its industry expertise, global footprint and management know-how to create investment opportunities that generate exceptional returns. Collectively, the financial services team has more than 100 years of experience across all sectors of the financial services industry, providing strong historical knowledge, working relationships with key financial services players and deep expertise to guide our investment choices.
Currently, the U.S. financial services sector is experiencing a sharp downturn, which began in the summer of 2007. Industry valuations generally reflect this stress, having declined 20-80% across various sub-sectors since summer 2007 with multiple sub-sectors trading at discounts to book value. Based on past cycles and considering the unique characteristics of the current crisis, Carlyle believes that many financial services firms will need to raise equity capital to shore up their balance sheets and restore confidence in the marketplace. Given the scope and scale of the current distress, Carlyle believes that even established companies with proven business models and brands are likely to seek fresh capital at depressed prices, enhancing the likelihood for investors to earn attractive risk-adjusted returns.
The financial services team’s approach to investing comprises the following major principles.
- Industry Specialization: Since its inception, Carlyle has adopted an industry-focused approach to investing. In-depth knowledge of specific industries improves our ability to source and create deals, conduct effective due diligence, develop strong relationships with management teams and identify potential buyers as part of a coherent exit strategy.
- Consistent and Disciplined: A conservative and disciplined investment philosophy produces the highest consistent returns. We seek to make sound investments in good companies with strong management teams and structure our transactions with relatively conservative amounts of debt.
- Influence and Strategic Partnering: We draw on existing relationships as well as forging new ones to bring the most value to the investment – be it during the due diligence phase or in advising portfolio companies in ongoing operations.
- The Carlyle Edge: We pursue investments only if we believe we have an edge over our competition in the form of deep industry knowledge, global expertise, positive relationships with management teams, the ability to move quickly to commit to transactions, and/or the opportunity to participate in strategic joint ventures with corporate partners.
