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Investing.com -- Carlyle Group (NASDAQ:CG), the Washington-based private equity firm, anticipates taking more of its portfolio companies public this year, and remains open to large leveraged buyouts, according to a Reuters interview. This comes despite a slow start to merger activity in the United States this year, partly due to market worries about potential trade war implications from the Trump administration’s tariff rhetoric.
The firm plans to sell assets worth between $4 billion and $5 billion this year, either through Initial Public Offerings (IPOs) or the sale of existing investments. This is roughly similar to the $5 billion worth of exits from its private equity portfolio in 2024.
Brian Bernasek and Steve Wise (LON:WISEa), Carlyle’s co-heads of Americas private equity, expressed optimism about a resurgence in dealmaking later this year. Bernasek noted in the interview that the situation has improved significantly over the last few quarters, with more clarity around interest rates and inflation, which has decreased and stabilized at a reasonable level.
Despite a decline in global M&A volumes to $441.7 billion so far this year, down from $523.4 billion during the same period a year ago, Carlyle remains confident. The firm believes that the potential impact of a trade war on its companies would be minimal, as most do not manufacture products that are imported into or exported outside the United States. As Wise explained, over 80% of their companies are not affected by tariff discussions, mainly because many of their businesses are in the services sector.
While high interest rates over the past two years have made financing large leveraged buyouts more difficult, Carlyle is prepared to engage in large deals in a "higher for longer" rate environment. Wise stated that the firm is not afraid to undertake large deals, particularly with industry leaders that hold strong relative market shares.
Bernasek highlighted the opportunity to capitalize on the IPO markets, noting that historically, Carlyle has taken companies public at around twice their value and eventually sold them at around three times their value.
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