2010 Annual Report - The Carlyle Group

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Deep industry experience applied globally in a seamless,selfless way—that’s the heart of One Carlyle.As healthcare needs rise around the world, our Global Healthcare team, led by Managing DirectorsKaren H. Bechtel and Stephen P. Wise, has been in increasing demand among Carlyle colleagues. In2010, Karen and Steve were honored with the One Carlyle award for leading transactions and supportingportfolio companies on five continents.Karen and Steve brought their wealth of healthcare industry expertise to create value in a numberof investments, including Healthscope in Australia, Qualicorp in Brazil and Qualicaps in Japan.They supported other Carlyle teams across the globe in every way they could—through analysis, duediligence and troubleshooting—putting the interests of the firm ahead of their own. At the sametime, their focus on improving the performance of the MultiPlan and HCR ManorCare investmentsproduced attractive results for investors of Carlyle Partners IV, L.P. and Carlyle Partners V, L.P.One Carlyle is a tangible differentiator for our firm, and Karen and Steve’s work is representative ofthis spirit of collaboration that flows throughout Carlyle.One CarlyleOne Carlyle is the foundation of our strategyand embodies our core values and ourapproach to accessing global markets.In 2010, we strengthened this approachby rewarding collaboration across funds,enhancing our brand marketing strategyand expanding our corporate citizenshipactivities. Approximately half of theequity that we invested or committed inCorporate Private Equity and Real Assetsin 2010 went to One Carlyle transactions—those drawing resources from two ormore Carlyle funds. We plan to continueto dedicate significant resources to thiscross-firm collaboration to ensure thatOne Carlyle remains a key differentiatorfor our firm in the global marketplace.military vehicles worldwide. The company’s hybrid system is in operation in some3,500 buses and coaches in more than 160 cities across the globe. Allison estimatesthat its hybrid system has contributed to an overall fuel saving of more than 65 millionliters of fuel to date and a corresponding reduction of approximately 170,000metric tons of carbon dioxide.With more than 15,000 Allison-equipped buses now operating in China, the companyis leveraging its top position in the commercial-duty automatic transmission industryin China to introduce hybrid buses to cities throughout the country. In addition,Allison completed a new manufacturing facility in India and production began in 2010,which is expected to further bolster the company’s performance across Asia and, inparticular, in China.Healthscope. In 2010, Carlyle’s Asia and U.S. Buyout teams collaborated to acquireHealthscope, Australia’s second-largest hospital provider. Both teams agree that theOne Carlyle global platform was instrumental in bringing the transaction together. TheU.S. Buyout team provided the healthcare industry expertise, while the Asia Buyoutteam brought an intimate knowledge of the company and the Asian and Australian markets.The result: the acquisition of a high-quality company in a strong, growing market.NBTY. In one of the largest private equity transactions in 2010, Carlyle Partners V,L.P. and Carlyle Europe Partners III, L.P. teamed up to acquire NBTY, Inc., a verticallyintegrated manufacturer and retailer of high-quality vitamins and nutritional supplementsin the United States with operations worldwide. The company sells more than25,000 SKUs under a portfolio of 50 owned and licensed brands—including Nature’sBounty, Pure Protein and MET-Rx—which hold leading positions across their respectivecategories, channels and geographies.54 The Carlyle group
section FIVE CollaborationThe transaction is an excellent example of how the One Carlyle global platform works for bothour investors and our portfolio companies. During the due diligence process, Carlyle’s U.S.Consumer and Retail team collaborated with several other teams across the globe, includingthe Government Affairs team in Washington, DC, which assisted with regulatory issues, andCarlyle’s Asia Buyout and Growth Capital teams in China, which helped evaluate opportunitiesto enhance NBTY’s low-cost position in the nutritional supplements industry throughvarious sourcing opportunities in Asia.Given NBTY’s significant retail presence in Europe, principally through the Holland & Barrettbanner in the United Kingdom, the U.S. Consumer and Retail team also reached out toCarlyle’s Europe Buyout team for its on-the-ground expertise. In conjunction with this collaboration,Carlyle Europe Partners III, L.P. also made a sizable equity commitment to thetransaction. We believe the collective experience of Carlyle’s U.S. and Europe Buyout teamsin their respective markets, coupled with the proactive efforts of Carlyle’s Asia Buyout andGrowth Capital teams, will help drive profitable growth for NBTY and enhance the value ofthis investment.€480 millionB&B’s enterprise valueat acquisitionWorking together, working greenOur acquisition of the B&B Hotel Group in 2010 combines theexperience of Carlyle’s real estate and buyout teams and B&B’sexcellent management team. Our shared goal: grow the chain,valued at €480 million at acquisition and comprising 223 budgethotels with a total of 16,162 rooms, across France, Germanyand Italy. We plan to accelerate the pace of new hotel openingsacross Europe and expand into new territories such as Poland,Portugal and the Netherlands.The transaction represents collaboration betweenCarlyle Europe Partners III, L.P. and Carlyle EuropeReal Estate Partners III, L.P. The investment teamwas particularly impressed by B&B’s commitmentto meeting and exceeding environmental, social andgovernance standards set by industry regulatory bodies,including participation in the Green Key Eco-RatingProgram. Carlyle is committed to fully supportingthe company as it continues to focus on ESG issues.Eric E. SassonManaging Director andHead of Carlyle EuropeReal Estate PartnersFranck FalézanManaging DirectorEurope Buyout TeamThe Carlyle group 55
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GLOBAL ALTERNATIVE ASSET MANAGEMENT
Page 6 and 7: Diversificationcreates opportunityO
Page 8 and 9: Experienceto invest wiselyOur stron
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Page 12 and 13: Daniel A. D’AnielloCo-Founder and
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Page 16 and 17: How is Carlyle different?We have th
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Page 54 and 55: The value of collaborationCollabora
Page 58 and 59: We are keenly awareof our responsib
Page 60: To strengthen our ties to the commu
Page 63 and 64: our / purposeInvest wisely. Create
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2010 Annual Report - The Carlyle Group

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