Key Takeaways
- • David Rubenstein co-founded the Carlyle Group in 1987 in Washington, D.C., after reading about William Simon's leveraged buyout of Gibson Greeting Cards, which was financed with $1 million of equity and $79 million of debt.
- • Carlyle launched with $5 million, of which $3 million was allocated to investments and the remainder to operating expenses, with T. Rowe Price among its early backers.
- • Carlyle raised $100 million for its first buyout fund and has since raised billions of dollars across more than 100 funds, according to Investopedia.
- • Carlyle went public in 2012, raising $671 million in its initial public offering.
- • Rubenstein continues as co-chairman alongside co-founder William E. Conway, Jr., while co-founder Daniel A. D'Aniello stepped down as chairman in 2018 and became chairman emeritus.
Summary
According to Investopedia, David Rubenstein's path to becoming a private equity co-founder began with a modest upbringing in Baltimore, Maryland, where his father worked as a postman and never earned more than $7,000 a year. Rubenstein studied political science at Duke University on scholarships and part-time work, then attended the University of Chicago Law School on a full scholarship. He joined the New York firm Paul, Weiss, Rifkind, Wharton & Garrison before moving into public service, serving as chief counsel to Senator Birch Bayh and later as deputy assistant to President Jimmy Carter for domestic policy from 1977 until Carter lost reelection four years later.
Following his government service, Rubenstein was unemployed for six months before returning to law. He became dissatisfied with the work and, after reading about former Deputy Treasury Secretary William Simon's leveraged buyout of Gibson Greeting Cards, decided to pursue private equity. Simon and partner Ray Chambers had bought the company with $1 million of their own money and $79 million in debt, then improved operations and took it public for $290 million. Unable to recruit finance professionals to form a firm, Rubenstein and two partners launched the Carlyle Group in 1987, named after the Carlyle Hotel in New York City where early meetings were held.
Carlyle was based in Washington, D.C., rather than New York, which Rubenstein believed would help attract capital by focusing on businesses affected by government policy. The firm began with $5 million, $3 million of which was invested and the rest used for operating expenses. T. Rowe Price (TROW) was an early backer. Until 1990, Carlyle raised capital on a deal-by-deal basis, with its first buyout fund raising $100 million. The firm has since raised billions of dollars across more than 100 funds from investors in the United States and abroad. Carlyle's 2012 IPO raised $671 million, a figure Reuters described as unimpressive in its coverage of the offering, according to the cited sources.
Rubenstein remains co-chairman with William E. Conway, Jr. Investopedia notes that his wealth derives from management fees earned by managing investor capital through Carlyle, which grew into one of the largest private equity firms in the world.
Following his government service, Rubenstein was unemployed for six months before returning to law. He became dissatisfied with the work and, after reading about former Deputy Treasury Secretary William Simon's leveraged buyout of Gibson Greeting Cards, decided to pursue private equity. Simon and partner Ray Chambers had bought the company with $1 million of their own money and $79 million in debt, then improved operations and took it public for $290 million. Unable to recruit finance professionals to form a firm, Rubenstein and two partners launched the Carlyle Group in 1987, named after the Carlyle Hotel in New York City where early meetings were held.
Carlyle was based in Washington, D.C., rather than New York, which Rubenstein believed would help attract capital by focusing on businesses affected by government policy. The firm began with $5 million, $3 million of which was invested and the rest used for operating expenses. T. Rowe Price (TROW) was an early backer. Until 1990, Carlyle raised capital on a deal-by-deal basis, with its first buyout fund raising $100 million. The firm has since raised billions of dollars across more than 100 funds from investors in the United States and abroad. Carlyle's 2012 IPO raised $671 million, a figure Reuters described as unimpressive in its coverage of the offering, according to the cited sources.
Rubenstein remains co-chairman with William E. Conway, Jr. Investopedia notes that his wealth derives from management fees earned by managing investor capital through Carlyle, which grew into one of the largest private equity firms in the world.
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