CalPERS Cashes in Carlyle Stake

(June 5, 2013) -- The California Public Employees Retirement System (CalPERS) will sell off its 4.1% stake in the Carlyle Group, amounting to 12.7 million shares, according to the private equity/asset management giant.

In 2001, the public pension fund bought 5.5% of the company for $175 million. As of the end of trading Monday, CalPERS' stake was worth $373.3 million. 

Carlyle sold shares to major institutional investors in a bid to raise cash for its IPO, which happened last year. CalPERS also has a $1.1 billion stake in Silver Lake, a technology based private equity firm, which has not yet gone public.

 Historically, the Carlyle Group has paid strong dividends, and according to the preliminary prospectus relating to the offering investors should expect a dividend payment of 16 cents in the first three quarters of every year and 16 cents or more in the final quarter of every year. An investor who picked up CalPERS' 12.7 million shares could expect slightly over $2.1 million dollars quarterly in dividends.

Year to date the Carlyle has experienced a greater sense of volatility the most of the market place. The price per share skyrocketed by 42% from January 1 before peaking on February 19, and then plummeted 32% to its current trading price at $28.00 a share. 

CalPERS has granted the stock's underwriters a 30-day option to purchase 1.7 million of these common units.

The move comes on the heels of another major private equity profit-taking by America's largest public pension: A month ago, Apollo Global management disclosed to regulators that CalPERS was planning to sell 6.5 million share. This coincided with the Abu Dhabi Investment Authority and two of Apollo's founders also unloading major stakes in the company.   --James Curtin