Random Ramblings

Will or won’t Carlyle Group go public? That’s the question this morning, following an announcement that the firm has agreed to sell a 7.5% position to a state-owned investment group in Abu Dhabi. My assessment is that it will, but not anytime soon.

Under terms of the ownership sale, Mubadala Development Co. will acquire its 7.5% position in exchange for $1.35 billion. For context, CalPERS paid just $175 million for a 5% stake back in 2000. Moreover, Mubadala also will commit $500 million to a new U.S. buyout fund that Carlyle is currently raising. It would be the group’s first fund investment with Carlyle, although state-owned sister group ADIA is a longtime Carlyle backer.

So back to the IPO question. On the one hand, this deal gives Carlyle a definitive value ($20b) of which to work with – similar to what Blackstone did with the Chinese government. On the other hand, Carlyle has been able to recognize some brand equity without having to go through the distasteful rigmarole of a public offering (it’s unclear if the transaction is proving Carlyle shareholders with actual liquidity).

Rubenstein seemed to tip his hand a bit yesterday at the PEA Conference in New York, by saying that all of the top firms will be public within the next five years. This is a slight semantic shift from past statements, in which he’s expressed a vaguer belief (i.e., no mention of “top” firms) in the likelihood of publicly-traded private equity. In other words, Carlyle will proceed with an IPO – but not until it’s good and ready. Until then, he’ll just kick back and watch the continued travails of Blackstone and KKR. Maybe during High Tea at The Emirates Palace…

*** Back in February, I told you that the Colorado-based team of Mobius Venture Capital had formed a new firm called Foundry Group. Now a reliable source tells me that the firm has held a $158.75 million first close on its debut fund, from limited partners like Guardian Life, Morgan Stanley, Parish Capital and UTIMCO. It had originally been targeting $175 million, but has since bumped it up to $225 million with a final close expected within the next month.

I was drinking with some Foundry guys earlier this year at VC in the Rockies, when one of them got a cell phone call with word of their first institutional commitment. Lots of excitement all around, although everyone kind of shut up once they remembered that a reporter was in their midst (they declined comment for this piece). Probably an even bigger celebration for the first close, and it really is quite impressive. Mobius doesn’t exactly have a stellar reputation for returns, as evidenced by some Silicon Valley partners who are still on the job market. But apparently Brad Feld’s track record helped Foundry make the grade, along with those of fellow Foundry partners Seth Levine, Ryan McIntyre, Jason Mendelson and Chris Wand.

*** More VC scoop: Vinit Nijhawan has left Key Venture Partners, which he had joined back in 2005 as a venture partner. KVP managing director David Dame confirmed the news yesterday (Nijhawan remains on the firm’s website), and said that it was caused by a divergence of stage focus: “Vinit decided that he has a greater interest in early-stage investing, whereas we’re more focused on growth-stage.”

I also asked Dame about a secondary explanation – that Nijhawan has no economics in the current KVP fund, and had grown weary of waiting for the next one. Dame acknowledged that Nijhawan had the possibility for economics in the next fund, but reaffirmed his original “stage” statement. He also said that KVP still has dry powder for new investments, and that marketing for the next fund is expected to begin in early 2008. There had been reports that marketing for the fund already had begun and was then postponed, but Dame says those talks were all informal, without any PPM ever being drawn up. Some of the rumors, he says, were born of secondary firm interest in some sort of stapled transaction – but those discussions died once Key Corp. said that it wouldn’t sell its existing LP position.

*** And even more VC scoop: Zink Imaging has raised $25 million in a VC funding round led by Petters Group Worldwide. Zink is one of the Boston area’s most exciting startups, and I’ve posted a write-up and some video. Get it here.

Just Linking Around
* We had some delivery troubles yesterday. If you did not receive the Wednesday edition, you can read it here.

* Angels tending toward older companies.

* The latest deal damsel in distress is Sallie Mae. The New York Times reports that the buyers hope to pressure Sallie Mae into accepting a lower price, and might be willing to walk away (i.e., pay a $900m breakup fee) if unsuccessful.

* S&P says to expect a tusnami of U.S. corporate defaults. The Financial Times has more. Better start running…

* TechCrunch has the last-ever cover of Business 2.0. Nothing like leaving without ever having to say you’re sorry…

* Allied Capital has sold financial advisory firm Gordian Group back to its founding bankers, according to The Deal.

* For perhaps the first time in the history of private equity conferences, there are enough women present to generate lines outside of the restroom. Progress can be tracked in so many ways...