Carlyle Group: Defense Deals, a 9/11 Crisis and the Seattle Seahawks

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The Carlyle Group was founded in 1987 by five partners including David Rubenstein, William E. Conway Jr. and Daniel A. D'Aniello, named for the Carlyle Hotel in New York but run from Washington, D.C., with $5 million from backers such as T. Rowe Price and the Richard King Mellon family. Rubenstein, a former Carter administration lawyer, understood federal procurement, and the firm bought defense businesses Wall Street avoided, including GDE Systems and Magnavox Electronic Systems. Its big early win was the 1997 purchase of United Defense Industries for $850 million, taken public in 2001 and fully sold by 2004. On September 11, 2001, Carlyle was holding its annual investor conference in Washington, attended by Shafiq bin Laden, an estranged brother of Osama bin Laden; the family had invested $2 million in a Carlyle fund in 1995 and withdrew it in October 2001. The ties were featured in Michael Moore's Fahrenheit 9/11.

In 2003 Carlyle hired former IBM and Nabisco chief Lou Gerstner as chairman and moved into mainstream buyouts: Hertz for $15 billion in 2005, Freescale Semiconductor for $17.6 billion and Kinder Morgan for $27.5 billion in 2006. Not every deal worked. Hawaiian Telcom, bought for $1.6 billion in 2004, went bankrupt in 2008, wiping out Carlyle's $425 million equity stake, but non-recourse debt and the 2 and 20 fee structure protected the firm. Carlyle went public on Nasdaq in May 2012, raising $700 million, and by 2024 managed $441 billion with over $5.4 billion in revenue. Leadership passed from the founders in 2017 to co-CEO Glenn Youngkin, now governor of Virginia, then Kewsong Lee and, from 2023, Harvey Schwartz.

• Carlyle bought a stake in streetwear brand Supreme in 2017 and sold it at a profit in 2020.
• In 2021 it acquired Jagex, the British studio behind RuneScape.
• It bought Italian motorcycle apparel brand Dainese in 2022.
• It invested in the NWSL's Seattle Reign FC in 2024 and became a co-owner of the NFL's Seattle Seahawks in 2026.
• Freescale struggled when auto chip sales fell in the 2008 recession.