The Carlyle Group founder Bill Conway wishes his firm had been more aggressive over the last few years, even though it invested $10-15 billion in equity. "We should have done every deal," said Conway, a behind-the-scenes figure who made a rare appearance at the Private Equity Analyst Outlook conference in New York last week. "Every deal worked. Every deal paid," he said.
According to Corporate Financing Week, a CIN sister publication, Conway didn't offer any examples of missed opportunities, but the firm reportedly dropped out of the bidding for two deals last year: Michaels Stores, acquired by Bain Capital and the Blackstone Group for $6.2 billion, and Univision, acquired for $12.3 billion by a group led by Madison Dearborn Partners.
In another frank concession, Conway said he is often too slow in ousting executives at companies Carlyle owns. "I think I have this very human heart," Conway said, to scattered laughter. "I like to think that if a manager is underperforming, I can do something to help. But it has been my experience that I should have shot them at the beginning." But his heart probably won't change. "I will tell you I will likely keep making that mistake."
Conway defended Carlyle's handling of Hertz, the car rental company, which some called a classic quick flip that undermined the private equity's public image. In August 2005, Carlyle and two other firms paid $2.3 billion in cash for Hertz from Ford Motor Co. in a $16 billion deal. They paid themselves about $1 billion in dividends and took it public for $1.3 billion in November of last year, using the proceeds to pay off the debt from the earlier dividends and pay themselves yet another dividend. They made close to three times their investment, he said.
Conway said he did not think the deal was as rushed as some have said and that it's not fair to suggest the firms didn't do anything to improve the company. The owners brought in a new ceo, Mark Frissora, and invested in its equipment rental business. Still, he wasn't afraid to admit, "We made a ton."