Carlyle confirms switch to corporation structure

This comes as Delaware has decreased the highest corporation tax rate from 35% to 21%, leading a number of private equity firms to switch their structure, including KKR, Blackstone Group and Ares Management, among others.

All of Carlyle's private holdings units and common units will be exchanged for one class of common shares. The new corporation structure is expected to boost shareholder alignment under the new "one share/one vote" governance model. It is also expected to improve trading liquidity, and provide a fixed dividend, enabling improved capital allocation for the organisation's new investors.

As for the new annual dividend of $1.00 per share, it will result in an approximate 4% yield on current unit price. The switch also includes the termination of the tax receivable agreement for $1.50 per private holdings unit, payable over five years.

The structure switch comes as the Carlyle Group reached $222.7bn in assets under management during the second quarter of 2019. Corporate private equity assets have climbed to $83.9bn, representing a 3% increase compared with Q2 2018.

The corporate private equity portfolio consists of European buyouts ($13.4bn), Asian buyouts ($12.3bn) and US buyouts ($38bn), among other corporate private equity investments ($20.2bn).

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