FORTUNE -- The Carlyle Group has gotten all sorts of unwanted attention this week, as majority shareholder of defense contractor Booz Allen Hamilton (BAH), where NSA leaker Edward Snowden worked before hopping a flight to Hong Kong.
For the uninitiated, Carlyle (CG) bought a majority stake in the company's government services business for around $2.5 billion in 2008 – via a complex transaction in which Booz Allen's commercial business was spun off into an independent entity now known as Booz & Co. Carlyle then took Booz Allen Hamilton public in 2010 at $17 per share.
Since then the stock has experienced a number of peaks and valleys, although it's never actually topped $20 per share. It was at $18.65 a couple of weeks ago, but is trading at just $16.65 per share as of this writing (including more than a 4% drop since Snowden identified himself).
At issue isn't so much Booz Allen's specific connection to Snowden, but rather that this episode could cause the government to reduce its epic reliance on outside contractors for intelligence work.
This is where things could get a bit dicey for Carlyle. The firm already has made back well more than its original $956 million equity investment via dividend recaps (it also provided some mezzanine capital), but it never sold any of its 98 million or so shares. Not in the IPO, nor in the intervening 31 months.
The firm's 70% position currently is valued at around $1.64 billion, or $120 million lower than it was at market close last Friday. And if the company actually does face a major loss of business, then the value would only go down from here.
Obviously that's all hypothetical and predicated on long-term behavioral changes caused by an event that's still less than a week old. But, if it comes true, then Carlyle may have wished it had already begun selling down a bit…
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Is Hertz better off today than it was seven years ago?
FORTUNE -- Hertz's private equity sponsors sold their remaining shares earlier this week, fully existing the company more than 7 years after buying it from Ford Motor Co. (F).
That deal came in the midst of private equity's "golden age," and was one of that era's most-criticized transactions. Not so much the original purchase, but rather the subsequent $1 billion dividend MOREDan Primack - May 9, 2013 3:35 PM ET
Big private equity firms are offering diversified products, but one size may not fit all investors.
FORTUNE -- One year ago I recommended that you buy stock in publicly-traded private equity firms, like Apollo Global Management (APO) and The Carlyle Group (CG). My theory was that such issuers were being undervalued by analysts who obsessed over assets under management (i.e., fund management fees), while paying too little attention to underlying portfolio MOREDan Primack - Apr 29, 2013 2:26 PM ET
Have reports of the club deal's death been greatly exaggerated?
FORTUNE -- Before the financial markets went to hell in a securitized handbasket, private equity firms regularly partnered with each other on the same transactions. These so-called "club deals" sometimes included as many as seven firms, and were a way for private equity to purchase larger and larger companies (while reducing possible competition). In fact, of the 25 largest leveraged buyouts completed MOREDan Primack - Apr 10, 2013 2:31 PM ET
Do private equity firms need to make a structural change?
FORTUNE -- Private equity funds have long featured "hurdle rates," or preferred returns that funds must generate for investors before fund managers get to begin sharing in the profits (i.e., carried interest). But one senior private equity executive believes that current hurdle rates pose "a potential crisis" for the industry.
Jeremy Coller, founder and chief investment officer of Coller Capital, made the comments last MOREDan Primack - Mar 5, 2013 12:33 PM ET
What didn't kill private equity made it stronger.
FORTUNE -- David Rubeinstein, co-founder of The Carlyle Group (CG), believes that the private equity industry is stronger today than before the Great Recession.
Speaking at the SuperReturn International conference in Berlin, Rubenstein argued that private equity faced several serious threats in the wake of the Lehman Brothers collapse. Not only massive decreases in fundraising and deal-making, but also the possibilities of debilitating regulation, MOREDan Primack - Feb 27, 2013 3:48 AM ET
Carlyle's earnings miss aside, it's been quite a run for listed private equity firms.
FORTUNE -- Private equity firm shares have been on a year-long tear, even though yesterday's headlines were about declines caused by The Carlyle Group's (CG) earnings miss. Makes me feel much better about my advice last May, which was the only time I've even flirted with the hazardous world of stock-picking:
I think there's potential upside to private MOREDan Primack - Feb 22, 2013 11:56 AM ET
Why Duff & Phelps is going private.
FORTUNE -- Financial advisory and investor bank Duff & Phelps (DUF) today announced that it would be acquired for around $655 million by a private equity consortium that includes The Carlyle Group (CG).
It's a $15.52 per share offer, which represents a 19.2% premium to last Friday's closing price. Assuming no superior offer during an upcoming "go-shop" period, expect the deal to close before the end MOREDan Primack - Dec 31, 2012 11:15 AM ET
Are social photo apps laying out the roadmap for killing off companies like Getty?
FORTUNE -- Some Instagram users are in full-filtered panic mode today, after the digital photo-sharing company altered its terms of service. Basically, Instagram will allow sponsors to promote user content and associated data. So if you upload a photo of your Awesome Pretzel Chicken Tenders, don't be surprised to see it featured in the Instagram feed of Guy Fieri's American MOREDan Primack - Dec 18, 2012 3:57 PM ET
Why U.S. private equity firms are quietly snapping up buildings in Europe at bargain prices.
By Charles Wallace, contributor
FORUNE -- The Blackstone Group has raised a dedicated $4 billion European real estate fund; David Abrams, head of European real estate investment for Apollo Global Management, says his firm has made 30 investments this year in the U.K., Germany, Ireland, and Spain; the Carlyle Group is buying mainly in Northern Europe, MOREDec 17, 2012 5:00 AM ET
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