College Times

Carlyle Group funds buyout of TCW from Societe Gene

By E. Scott Reckard, Los Angeles Times

Published: Thursday, August 9, 2012

Updated: Thursday, August 9, 2012


LOS ANGELES - Private-equity giant Carlyle Group is buying TCW Group Inc. from
the French bank Societe Generale, a deal that will give management and
employees of TCW a 40 percent stake in the asset manager.

Los Angeles-based TCW manages investments for some of the nation's largest
pension funds, universities and other big investors.

Financial terms of the transaction were not announced in a statement from the
companies Thursday morning. The long-rumored deal is expected to close in the
first quarter of 2013.

Most of the equity for the transaction is coming from two Carlyle funds:
Carlyle Global Financial Service Partners, which invests in financial firms,
and the buyout fund Carlyle Partners V.

The management of TCW, which will stay largely intact, already had a lesser
stake in the company and is making an investment in the deal.

TCW, short for Trust Company of the West, was founded in 1971 and currently
manages about $130 billion in investments through various equity and
fixed-income funds, including a $42 billion mutual fund franchise.

The company was rocked in late 2009 when Chief Executive Marc Stern fired
investment chief and star bond trader Jeffrey Gundlach.

Gundlach formed his own company, DoubleLine Capital, where more than 40 of his
TCW staffers soon joined him, prompting TCW to buy Metropolitan West Asset
Management, a prominent Westside bond-fund manager.

Stern is expected to become chairman of the newly formed TCW Board of
Managers, with David Lippman, currently the head of fixed income at TCW,
succeeding him as president and CEO of the TCW Group.


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