Term Sheet

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

It's official: Carlyle buys TCW Group

August 9, 2012: 12:25 PM ET

Carlyle brings TCW in-house... sort of.

FORTUNE -- The Carlyle Group (CG) today confirmed the poorly-kept secret that it is buying Los Angeles-based asset management firm TCW Group from Société Générale.

No financial terms were disclosed for the deal, although an earlier press report put the enterprise value for TCW at approximately $700 million. Carlyle will hold around a 60% position, with TCW management and employees holding the remainder. Former TCW fixed income boss David Lippman will take over as company president and CEO, with current CEO Marc Stern transitioning into a chairmanship role.

Société Générale had acquired a majority stake in TCW eleven years ago for approximately $800 million, later boosting the position to 85%. But the French bank wrote down the value of its TCW stake by around €200 million earlier this month, in a move that helped contribute to a 42% drop in quarterly profit.

Nothing too shocking about a private equity firm acquiring an asset manager. The only interesting twist here, however, is that Carlyle opted to make TCW a regular portfolio company, rather than integrate the firm into Carlyle's own asset management platform.

Carlyle has significantly expanded its asset base via acquisition over recent years, most notably with last year's purchase of private equity fund-of-funds and secondaries manager AlpInvest. In fact, having "public currency" to make such deals was one of the reasons Carlyle went public earlier this year.

TCW would have nearly doubled the firm's AUM by contributing around $130 billion, and really blown out its hedge fund business. Instead, it will be held inside of two Carlyle private equity funds. Don't be surprised to see TCW on the IPO calendar within the next couple of years.

Sign up for Dan's daily email newsletter on deals and deal-makers: GetTermSheet.com

Join the Conversation
About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

Email a Tip | @danprimack | RSS
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.