BACKGROUNDER

Carlyle Group/Abu Dhabi Portfolio Companies

Last fall, the Mubadala Development sovereign wealth fund of the Government of Abu Dhabi paid $1.35 billion for a 7.5% ownership stake in the Carlyle Group.

Carlyle owns dozens of companies that do work in defense, homeland security, energy and other sensitive areas. According to government sources, thousands of federal contracts – worth an estimated total of $4.8 billion - were awarded between 2000 and 2006 to companies that were in The Carlyle Group’s investment portfolio as of June 2007.[1]

Carlyle/Abu Dhabi portfolio companies include:

  • Booz-Allen Hamilton[2], which held $1.2 billion in Department of Defense contracts last year, including for work on the Kinetic Energy Interceptor, a part of a missile intercept program;[3] and with the US Army for new networking systems.[4]
  • Kinder Morgan, which as of 2006 owned or operated 26,000 miles of pipelines, transported more than 2 million barrels of gasoline and operated terminals that could store nearly 70 million barrels of petroleum products.[5]
  • Vought Aircraft, the largest subcontractor to Boeing on the C-17 aircraft used by the US Air Force to carry troops, equipment and humanitarian aid.[6] Vought builds the cabin structures for Black Hawk helicopters[7] and produces parts for the V-22 Osprey, a helicopter used by the US Marines.[8]
  • ARINC, a company that provides communications and integration systems to government agencies, airports and surface transportation networks. In 2007, ARINC received more than $500 million in federal contracts from the Army, Navy and Air Force.[9]
  • Allison Transmission, which manufactures transmissions for the M1 Abrams Tank, Bradley Fighting Vehicle, and other vehicles.
  • AxleTech International, the automotive supplier of axle, brakes and other components used on vehicles including heavy trucks in Iraq and Afghanistan.
  • Sequa, the industrial maker of auto and aircraft parts. In 2006, Sequa had contracts both to do R&D on defense aircraft and missile defense systems and to maintain and build engines, turbines and other components for defense-related agencies.[10]

For more information, contact SEIU’s Andrew McDonald at 202-730-7338 or Andrew.mcdonald@seiu.org

SOURCES


[1] To conduct this analysis, SEIU first downloaded a list of Carlyle portfolio companies from the Capital IQ database in June 2007. SEIU then searched the federal government’s contracts database for contracts made with those companies and their affiliates during the period from 2000 through 2006. It is important to note that this is a best estimate, rather than a perfect data set. The Capital IQ database is routinely used as a source in the financial sector, but it may not always be perfectly up-to-date or it may include portfolio companies for which deals have been announced but have not yet closed. The federal government’s contracts database also depends on reports submitted by federal agencies, and those reports may in some cases be under- or over-inclusive.

[2] The Carlyle takeover of Booz-Allen Hamilton, announced in May 2008, is expected to close later this year.

[5] Kinder Morgan Inc., 10-K SEC filing, dated 3/1/2007, page 4.

[9] Fedspending.org