The Carlyle Group, based in Washington, is best known for its brass. Its boardroom is stuffed with formers: former presidents, former cabinet secretaries and former regulatory commissioners.
Former Reagan defense chief Frank Carlucci is chairman emeritus. He recently was replaced as chairman by Lou Gerstner, formerly the chairman of IBM. Former British Prime Minister John Major is chairman of Carlyle Europe; and George Bush Sr., the former president, is a senior adviser. James A. Baker, a former Treasury Secretary, is senior counsel. Arthur Levitt, the former Securities and Exchange Commission chairman under President Clinton, recently became a managing director.
The firm, which started out in 1987 with just $5 million under management, now has close to $14 billion. It boasts 550 clients worldwide, including large pension funds such as Calpers and big schools such as the University of Texas. The company focuses on management-led buyouts but also invests in real estate, new ventures and other assets. Its average annual return on investment is 29% across its corporate funds and 26% across its real-estate funds.
That's a fifty-one-percentage-point spread between the CEO class and the worker bees. Meanwhile, the working stiffs of the USA have their money trapped in 401(k)s hobbled by executives (Enron, Dynegy, etc.) who shirk their fiduciary duties and defraud their employees.
Any number with a plus sign in front of it isn't a bad average annual return these days (i.e., since the advent of the George W. Bush administration). A cynic might say that an investment return in the high twenties might even be worth killing for. (Figuratively, we can only hope.) Come hell or high water, the Republican class warriors get their lucre.
The title of the article, "Well-Connected," is an understatement. Or perhaps it is actually a misunderstatement.