“In the current environment, a big source of distributions has been the dividend recaps that we’ve done,” said Conway. “I think for a while that’s likely to continue.”
Private-equity firms pool money from investors including pension plans and endowments with a mandate to buy companies within about five to six years, then sell them and return the funds with a profit after about 10 years. The firms, which use debt to finance the deals and amplify returns, typically charge an annual management fee equal to 1.5 percent to 2 percent of committed funds and keep 20 percent of profit from investments.
Carlyle during the fourth quarter bought 55 percent of Vermillion, adding $2.2 billion in commodities assets to Carlyle’s Global Market Strategies business. The firm also acquired a 47.5 percent revenue interest in NGP for $424 million, after which Rubenstein said energy is the “single most attractive global area in which to invest today.”