Carlyle to launch fund for Africa

By Henny Sender in Berlin

Published: March 2 2011 23:21 | Last updated: March 2 2011 23:21

Carlyle plans to launch a $750m fund to invest in Africa, a continent long neglected by the large international
buy-out firms, people familiar with the US private equity group said.

David Rubenstein, the group’s co-founder, has a reputation for being a pioneer in raising and investing money
in frontier economies.

Mr Rubenstein was among the first buy-out executives to raise money in Libya and has oil money going into
Carlyle funds from resource-rich African nations such as Angola.

The soon-to-be-launched Carlyle fund would be overseen by a team of three with a presence in Johannesburg,
Zimbabwe and Nigeria, these people added.

Carlyle already has a significant presence in north Africa, as well as a dedicated private equity fund for the
Middle East and north Africa.

Many parts of Africa are now enjoying better prospects than at any time in recent history due largely to a rush
for resources led by the Chinese.

“The majority of Americans don’t pay enough attention to Africa,” one source close to Carlyle said. “It has
been China that has been the catalyst for economic activity in Africa.”

Carlyle’s fundraising machine is by far the most powerful of any of the large private equity groups. But
speaking at a conference in Berlin on Tuesday, Mr Rubenstein referred to a difficult fundraising environment, a
complaint echoed by executives at all of the significant private equity groups. For example, in 2007, at the
height of the boom, Carlyle raised $30bn, a figure it is unlikely to come close to today.

“We have seen more investment and more exits, but fundraising lags behind,” Mr Rubenstein said. Yet, he
added that he expected fundraising to improve due to low interest rates and the thirst of pension funds in
particular for yield. But even when the pension funds and sovereign wealth funds increase the money they
give to the buy-out firms, the fees they pay are likely to be dramatically smaller, Mr Rubenstein said.

The sovereign wealth funds in particular are becoming less passive, seeking to invest alongside the private
equity groups, hold separate accounts with them or invest directly and avoid paying fees.

Today, Carlyle has numerous specialised funds and has also been growing through acquisitions, bringing its
total assets under management, whether direct or indirect, to almost $150bn. These new funds and
acquisitions, such as its deal to acquire Alpinvest, which invests in private equity on behalf of its own investors,
comes as Carlyle is moving towards a public listing, following Blackstone and KKR, and also Apollo, which will
soon list.

A spokesman for Carlyle declined to comment.

Carlyle creates dental amalgam

By Martin Arnold, Private Equity Correspondent

Published: January 29 2011 02:36 | Last updated: January 29 2011 02:36

A new force in dentistry is being created by Carlyle, the US private equity group, which has bought two of the
biggest UK dentist chains and merged them into a group with almost 450 practices.

Carlyle said on Friday it would acquire Integrated Dental Holdings from the private equity arm of Bank of
America Merrill Lynch and merge it with Associated Dental Practices.

The deal values the two companies, numbers one and three in the UK respectively, at about £600m ($951m).

Palamon Capital Partners, which owns ADP, is rolling over its stake in the chain of 125 dentistry practices into a
holding of less than 25 per cent in the new company, in which Carlyle will own a majority position.

Richard Smith, who left Lloyds Pharmacy last year to become chief executive of IDH, will take charge of the
merged group, which is expected to treat more than 3.5m patients every year.

The deal values the two companies at 10 to 11 times their combined earnings before interest, tax,
depreciation and amortisation of about £55m-£60m.

The combination of IDH and ADP comes as the UK coalition government is launching an overhaul of the
National Health Service. It is seeking to cut costs and improve service in many areas. The merged company is
focused on NHS patients.

Mr Smith said the group would consolidate the fragmented UK market by snapping up other dentistry
practices.

“These businesses [IDH and ADP] only have 6 per cent market share, so there is still an opportunity to continue
to consolidate,” he said.

Government is developing new regulations for dentists, which will require them to register all patients, raise
the standard of services – such as by installing sterilisation rooms – and to undergo higher levels of supervision
and measurement.

These requirements are expected to push the industry to consolidate.

Mr Smith added that the merged company would seek to diversify into areas apart from dentistry, such as
primary care services and cosmetic treatments. “I do believe that we can be more than just a dentist,” he said.

Eric Kump, managing director of Carlyle, said: “We believe the business has the capability to extend into other
local primary care areas consistent with the government’s stated objective.”

IDH was bought by Merrill Lynch’s private equity arm for £290m in 2008, before the US bank merged with
Bank of America. Its sale to Carlyle for about £450m would generate a return of about 50 per cent on the
bank’s equity investment.

The UK’s second-largest dentistry chain, Oasis Dental Care, is also private equity-owned, after it was bought in
2007 by Duke Street.
Carlyle acquires Dutch fund of funds

By Martin Arnold in London

Published: January 26 2011 19:20 | Last updated: January 26 2011 19:20

David Rubenstein, Carlyle’s co-founder, has shrugged off fears over conflicts of interest in the US group’s
acquisition of AlpInvest Partners, the €32bn ($44bn) Dutch private equity fund of funds, by saying it was
following Goldman Sachs’s lead.

AlpInvest, which is being sold by APG and PGGM, two of the Netherlands’ largest pension funds, is a big
investor in several of the funds managed by Carlyle as well as many of those of managed by its main private
equity rivals.

Yet Mr Rubenstein predicted that rival groups would follow Carlyle’s move into the fund-of-funds industry,
adding that Goldman Sachs had shown how to invest both directly in deals and in rival funds without difficulty.

“Just as Goldman Sachs runs a secondaries private equity fund as well as a direct principal investment
business, we are doing the same thing, and there has never been a problem there,” Mr Rubenstein told the
Financial Times.

To address any conflict of interest fears, he said AlpInvest would be banned from investing in future Carlyle
funds and from sharing any information with its new parent that is provided by the other funds it backs.

The deal, valuing AlpInvest at several hundred million dollars, cements Carlyle’s position as the world’s biggest
private equity group by assets under management. Before the deal it managed $97.7bn of assets in 76
different funds.

AlpInvest, which invests on behalf of millions of Dutch civil servants, teachers and healthcare workers, has
secured a commitment from APG and PGGM to grant it €10bn of further investment mandates over the next
five years.

AlpInvest’s managers, led by chief executive Volkert Doeksen, are investing their own money to take a 40 per
cent stake. The managers will split voting rights 50:50 with Carlyle.

No Carlyle executives will sit on its investment committees.

PGGM and APG decided to sell AlpInvest last year after public criticism in the Netherlands over the high pay
packages received by some of its top executives.

AlpInvest paid €32.6m in salaries and wages to its 118 staff in 2009, of which 71 were investment
professionals, after making €60m of revenues from management fees and carried interest – a share of profits.

Carlyle has been expanding its product offering and last year it bought a 55 per cent stake in Claren Road Asset
Management, a $4.5bn hedge fund.

The Washington-based group – which once employed George H W Bush, the former US president, and the
former British prime minister John Major as advisers – is expected to go public as early as this year, provided
market conditions improve.

APG and PGGM were advised on the deal by Credit Suisse and Catalyst Advisors.