* Plans to sell 10 pct to raise $750-$800 mln in IPO-source
* Could kick off IPO marketing as soon as next week-source
* Carlyle's mkt valuation in IPO seen about half of
By Greg Roumeliotis
NEW YORK, April 10 Carlyle Group LP is eyeing a
market valuation of $7.5 billion to $8 billion in an initial
public offering, as the U.S. private equity firm prepares to
kick off a marketing blitz to investors, perhaps as soon as next
week, said a source with knowledge of the situation.
Carlyle, which has $147 billion in assets under management,
plans to sell a 10 percent stake to raise $750 million to $800
million in the IPO, the source told Reuters on Tuesday.
The firm had said in a regulatory filing earlier this month
that it might sell a 10 percent stake but its expectation on
market value was not previously known.
Carlyle declined to comment.
Carlyle's market value represents a significant comedown
from the peak of the private equity industry in 2006-2007, when
easy credit spurred the largest leveraged buyouts of all-time.
In 2007, Abu Dhabi state investment firm Mubadala paid $1.35
billion for a 7.5 percent stake in Carlyle, valuing the private
equity firm at $18 billion.
Blackstone Group LP, which went public in 2007,
raised about $7 billion by selling a 24 percent stake at the
time, implying a value of around $29 billion. Blackstone, which
had $166 billion under management at the end of 2011, has a
current market capitalization of $16.5 billion.
The sharp difference in the estimated market value of
Carlyle and that of Blackstone, even though the latter manages
only slightly more assets, highlights the difficulty investors
have in valuing private equity firms.
"Although these companies are all thrown into the same
bucket in the eyes of many, under the hood their operations and
culture and the way they share economics are all different,"
said David Snow, founder of PrivCap, a media company that covers
the private equity market.
Analysts say Blackstone commands a higher valuation than
many rivals because of the firm's diverse businesses. Besides
buyouts, the company's businesses also include financial
advisory, hedge fund solutions, credit and real estate. Many of
these businesses produce fee income, which is a steadier stream
of revenue than that produced by leveraged buyouts.
Carlyle too has taken steps to diversify its business,
although it still relies heavily on its buyout unit.
Carlyle will join a handful of other major private equity
firms that have gone public in recent years. KKR & Co LP
transferred its listing from Amsterdam to New York in 2010.
About 30 percent of its shares were listed in New York.
Apollo Global Management LLC, which has about 15
percent of its shares listed on the stock market, raised $382.4
million by issuing new shares in its IPO last year.
William Conway, Daniel D'Aniello and David Rubenstein, who
founded Carlyle in 1987, have recruited 21 banks to help market
the IPO to investors.
Carlyle plans to issue new equity in the offering and its
founders will not pocket any cash from the IPO directly.
Instead, the proceeds will be used to pay down debt and finance
operational needs, acquisitions and new fund commitments.
CalPERS, the California pension fund for public employees
and one of private equity's largest investors, took a 5.5
percent stake in the firm in 2000.
Bloomberg News earlier reported Carlyle's valuation