Carlyle vs. Carlyle, damages may differ from stated exposure
Posted by: admin in Investments and Raising MoneyFiled under: Financials and analyticals, The Carlyle Group, Investments
The Carlyle Group is apparently downplaying reports of current losses tied to loans. The private equity giant issued a statement on Tuesday to outline its exposure to Carlyle Capital Corporation.
Reuters also has a piece describing the situation. In the report, The Carlyle Group stated that the $150 million credit line to affiliate Carlyle Capital Corporation will have a limited impact on The Carlyle Group and its affiliates.
Carlyle Capital is a legally independent entity from The Carlyle Group, and as such it would technically have limited real damages to the parent even if it trades residential mortgage-backed securities. Having this corporate structure with different entities is the same reason that movie studios keep individual entities for each movie, and it is the reason that conglomerates keep entities separated from each other. This keeps the issues inside one operation from ever toppling the whole group.
One note was one of the Carlyle Group’s investment funds or portfolios hold Carlyle Capital shares. Carlyle stated that the The Carlyle Group is working tirelessly with Carlyle Capital Corp to “assist it in its efforts to maximize value for all interested parties.”
Unless they’ve figured out a way to begin making firms give real bids on loans, they have the ability to try to assist all they want. It’s just going to take some time and some pain for this to work itself through the system. The pain isn’t yet over. I’ve shown how vulture filings are starting to crop up. Maybe that’s the solution.
There is one issue that might be more pressing than any real monetary losses, and that’s the “image fallout” that Carlyle would take.
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