2010 Annual Report - The Carlyle Group

section TWO innovationCarlyle’s global footprint, combined with innovative investment strategies, providesimportant advantages in the marketplace. It opens doors to developing new relationshipsand strengthens existing partnerships. It helps us engage with governmentaland non-governmental organizations, sovereign wealth funds and other stakeholdersaround the world. We believe it also enables us to take different approaches, strayfrom the status quo to develop new initiatives, enter new markets and look at everytransaction from every angle.Expanding our investment reachAt Carlyle, we have a history of developing new initiatives to offer a wider range ofoptions for our investors. Within 10 years of the launch of our first fund in 1990 topursue buyout opportunities in the United States, we had expanded our buyout operationsto Asia and Europe and added funds focused on U.S. real estate, global energyand power, structured credit, and venture and growth capital opportunities in Asia,Europe and the United States.Over the last 10 years, our drive to innovate gained momentum as we developed anincreasing number of new, diverse products, including funds focused on distressedopportunities, infrastructure, global financial services, mezzanine investments, and realestate across Asia and Europe. We also launched new operations in fast-growing emergingmarkets, including in the Middle East and North Africa (MENA) and South America.In 2010, we continued to apply innovative strategies to expand our business to accessgreater opportunities to create value for our investors. Our new initiatives include:Claren Road Long-Short Credit. In 2010, Carlyle acquired a 55% stake in ClarenRoad Asset Management, which has $4.7 billion of assets under management as ofDecember 31, 2010. We believe Claren Road’s expertise in long-short credit enhancesthe One Carlyle platform.Energy Mezzanine. We formed a new team to focus on mezzanine debt investments inthe energy and power space, primarily in the United States and Canada. With morethan $1 trillion in forecasted capital needs each year in the United States, we believerobust demand for energy capital is creating significant opportunities for debt investing.The Carlyle group 25