CASE STUDY - The Carlyle Group

GLOBAL ALTERNATIVE ASSET MANAGEMENT
CASE STUDY
How Carlyle Creates Value
Deep industry expertise. Global scale and presence. Extensive network of Operating Executives. And a wealth of
investment portfolio data; we call it The Carlyle Edge. These are the four pillars of Carlyle’s value creation
model. By leveraging these core capabilities and resources—Carlyle has established a 25-year overall
track record of investing in companies, working to make them better and serving our investors’ needs.
A provider of English language learning services is transformed from
an orphaned business into a sophisticated corporation with online
programs and a network of franchise centers across the globe.
AT A GLANCE
Wall Street Institute, Inc.
Industry: Technology & Business Services
Region/Country: Luxembourg
Fund: Carlyle Venture Partners II, L.P.
Acquired: February 2005
Status: Exited
About Wall Street Institute and the Transaction
Carlyle acquired Wall Street Institute, Inc. (WSI) in February 2005. WSI was an
orphaned subsidiary of Laureate Education, which lacked the capital and management
resources necessary to grow the business. Carlyle recognized the opportunity
to take an under-managed, under-resourced and sub-optimized business,
infuse new leadership and growth capital, and transform it into a platform that
could take advantage of the growing global demand for English language instruction.
On August 19, 2010, when Carlyle exited the transaction, WSI was ranked #1
or #2 in most markets.
Key Value Creation Metrics
• Transformed an orphaned business through capital investments, new
management, geographic expansion, new curriculum and online offerings,
driving WSI’s ranking to the #1 or #2 brand in most markets.
• Leveraged the “One Carlyle” global network in Asia, Europe, the Middle
East/North Africa and South America to support existing operations and
new center development.
• Invested heavily in new information technology and systems to standardize
and streamline operations across the centers, providing a solid foundation
for growth.
• Expanded WSI’s product offerings, such as new online programs to facilitate
distance learning.
• Focused on penetrating corporate and institutional clients with new products,
resulting in a nearly 50% annual increase in sales for this segment.
THE CARLYLE GROUP
1001 PENNSYLVANIA AVENUE, NW
WASHINGTON, DC 20004-2505
202-729-5626
WWW.CARLYLE.COM

400+ centers
By tapping into Carlyle’s
global network and collaborative
spirit, WSI has expanded
its global footprint into
26 countries with more than
400 centers, including approximately
30 company-owned
centers in Germany.
ABOUT THE CARLYLE GROUP
The Carlyle Group (NASDAQ: CG) is a global
alternative asset manager with $170 billion of
assets under management across 113 funds
and 67 fund of funds vehicles as of December
31, 2012. Carlyle’s purpose is to invest wisely
and create value on behalf of our investors,
many of whom are public pensions. Carlyle
invests across four segments – Corporate
Private Equity, Real Assets, Global Market
Strategies and Solutions – in Africa, Asia,
Australia, Europe, the Middle East, North
America and South America. Carlyle has
expertise in various industries, including:
aerospace, defense & government services,
consumer & retail, energy, financial services,
healthcare, industrial, technology & business
services, telecommunications & media
and transportation. The Carlyle Group
employs 1,400 people in 33 offices across six
continents.
Carlyle believes these selected case studies should be considered
as a reflection of Carlyle’s investment process, and references to
these particular portfolio companies should not be considered a
recommendation of any particular security, investment, or portfolio
company. The information provided about these portfolio
companies is intended to be illustrative, and is not intended to
be used as an indication of the current or future performance of
Carlyle’s portfolio companies. The investments described in the
selected case studies were not made by any single fund or other
product and do not represent all of the investments purchased or
sold by any fund or other product. The information provided in
these case studies is for informational purposes only and may not
be relied on in any manner as advice or as an offer to sell or a solicitation
of an offer to buy interests in any fund or other product
sponsored or managed by Carlyle or its affiliates. Any such offer
or solicitation shall only be made pursuant to a final confidential
private placement memorandum, which will be furnished to qualified
investors on a confidential basis at their request.
Founded more than 35 years ago in Italy, WSI is now a global provider of English
language learning services in 26 countries. The company teaches English as
a second language through a proprietary, blended instruction method that
incorporates small-class instruction, computer-based exercises and student-tostudent
interaction in physical centers and via an active online community. WSI
currently has nearly 400 franchise centers globally and operates approximately
30 company-owned centers in Germany.
Growing the Business
With Carlyle’s encouragement and guidance, WSI’s management aggressively
pursued expansion in existing and new territories, standardized and streamlined
learning center operations, and expanded product offerings, including a greater
focus on corporate and institutional customers.
Leveraging the “One Carlyle” global network, WSI expanded its global footprint.
WSI executives worked with Carlyle team members in Asia, Europe, the
Middle East/North Africa and South America to support existing operations and
new territory development. In particular, WSI worked closely with Carlyle professionals
in Beijing and Hong Kong to develop and implement a strategic plan for
expansion in China. Through the hard work and initiative of the combined WSI and
Carlyle teams, WSI expanded into new territories and increased the total number
of learning centers in the network, driving double-digit increases in systems sales
from 2005 to 2010.
Improving Operations
While expanding geographically, management also focused on standardizing and
streamlining operations to improve the organizational structure and flow of information
within the company. Management invested heavily in back-end IT infrastructure
to facilitate greater reliability and scalability, enhance student information
systems and franchise center operations, and generate real-time updates as well.
Management also deployed systems to allow WSI to roll out new programs and initiatives
across the network with greater flexibility and security, enabling the network
to respond more quickly to market demands and product requests.
Expanding Product Offerings
With Carlyle’s support, management expanded its product offerings by developing
new online programs to facilitate distance learning and by concentrating on
corporate and institutional sales. WSI introduced a global community forum
called “The Village,” through which students engage with other WSI students
and alumni outside of the classroom. Management also increased its focus on
corporate and institutional sales to address the growing demand for English language
instruction outside of the retail channel. New programs like “Professional
English” and “Harvard ManageMentor” have expanded WSI’s market share with
professional and corporate users. Since building this platform in 2006, this segment
has grown nearly 50% annually.
MEXICO
NICARAGUA VENEZUELA
COLOMBIA
ECUADOR
PERU
CHILE
ARGENTINA
GERMANY
CZECH REPUBLIC
FRANCE SWITZERLAND
SPAIN
ITALY
PORTUGAL
TURKEY
ISRAEL
MOROCCO
SAUDI ARABIA
BRAZIL
RUSSIA
CHINA
THAILAND
SOUTH KOREA
TAIWAN
INDONESIA
With centers in 26 countries, Wall Street Institute
is well positioned to take advantage of the growing
global demand for English language instruction.