Last week The Carlyle Group announced that it was setting up a joint venture with Robert L. Johnson, the founder and chairman of US cable station Black Entertainment Television (BET), to launch a new private equity group.
Carlyle said that the group would pursue deals in the upper middle market, and will focus on the media, financial services and business services sectors in the US. The firm will make a seed-stage investment in Johnson’s new company and intends to co-invest in the deals sourced by the group.
Although full details of the new venture have yet to be disclosed, William Kennard, a managing director at Carlyle, told PEO that his firm’s motivation for getting involved was to partner with Johnson, and thus access new networks and proprietary deal flow currently beyond its reach.
It isn’t hard to see why Carlyle should find the partnership an attractive proposition: Johnson is one of the America’s most successful entrepreneurs, and his life almost embodies the American dream. He was born in 1946 in Hickory, Missouri, the ninth of ten children. He moved to Washington DC in the early 1970s, just as the cable television industry was getting started, and found a job as a lobbyist for the National Cable & Telecommunications Association.
In 1980 he used his contacts to launch BET. The company was profitable within five years of its founding, and in the early nineties it became the first African-American controlled company to be traded on the New York Stock Exchange. He later took the company private again before selling it on to the US media conglomerate Viacom in a $3 billion deal in 2001. Johnson is believed to have personally made $1.5 billion on the sale, earning him his place in Forbes’ list of the 400 richest people in the US. He is reported to have made significant donations to non-profit organisations including the United Negro College Fund, Howard University, and the Levine School of Music.
Since selling BET, Johnson has diversified his interests, investing in a range of sectors through his holding company The RJL Companies. The group holds stakes in financial services outfit Rollover Systems, gambling concern Caribbean Gaming and Entertainment and jazz recording studio Three Keys Music. It also includes a hotel real estate investment company, RJL Development, and since 2003 has operated the National Basketball Association’s Charlotte Bobcats. Last November it also announced that it was teaming up with Deutsche Bank to launch of the RJL Hedge Fund of Funds.
The Carlyle Group, of course, has pretty diverse interests itself. This could be the perfect partnership.