Carlyle Group is losing one of its oldest and biggest shareholders as the $264.9 billion California Public Employees' Retirement System plans to exit its 4.1% stake.
Carlyle on Monday filed to sell as many as 12.7 million shares, including an overallotment option of 1.66 million shares, to allow CalPERS to exit its stake. The Sacramento-based pension fund bought a 5.5% stake in Carlyle in 2001 for $175 million, according to a person familiar with the deal, before the stake was diluted by share sales.
CalPERS last month registered to sell about a quarter of its stake in Carlyle competitor Apollo Global Management. Shares of both asset managers have rallied this year, although Carlyle has lost about 9% from its peak in February. The pension fund has been one of Carlyle's largest fund investors and has more than $3.7 billion in the firm's pools, the person said.
“CalPERS has been a substantial investor in Carlyle funds since 1996,” Carlyle said in a statement. “After the sale of the common units, Carlyle will continue to manage a significant amount of limited partnership investments for CalPERS.”
CalPERS' stake was diluted when Mubadala Development Co., an investment vehicle owned by the Abu Dhabi government, bought a 7.5% stake in Carlyle for $1.35 billion in September 2007, and then again when Carlyle sold 30.5 million shares to the public on May 2, 2012.
Carlyle sold shares in last year's public offering for $22 each. They rose as high as $37.30 on Feb. 19 before paring gains. At Monday's closing price of $29.39, a sale of CalPERS' full stake would generate $374 million in proceeds, more than two times the pension fund's 2001 investment. That return doesn't take into account the dividends CalPERS has collected from its ownership.
Randall Whitestone, a spokesman for Carlyle, declined to comment. CalPERS spokesman Brad Pacheco did not immediately return a message seeking comment.