Mubadala writes down Carlyle stake by 36%

The Abu Dhabi investment fund’s annual report reveals it has written down its 7.5% stake in Carlyle’s management company, which would value the private equity firm at roughly $12.7bn.

Mubadala Development Company, an Abu Dhabi government-backed investment vehicle, has written down the value of its 2007 investment in The Carlyle Group.

The sovereign wealth fund’s first annual report, released today, details an “AED2.0 billion ($544 million) impairment charge on our unquoted investment in Carlyle based on prevailing market conditions at 31 December 2008”.

The fund invested $1.35 billion in September 2007 for a 7.5 percent stake in the private equity giant. Taking into account the 10 percent liquidity discount the deal was agreed on, the transaction valued Carlyle at $20 billion.

The current write-down would move Carlyle’s valuation somewhere into the region of $12.7 billion – a 36 percent drop in value.

Mubadala followed the California Public Employees’ Retirement System in taking a stake in Carlyle. The US pension purchased a 5.5 percent stake in the firm in 2000.

Carlyle took third place in the recently released PEI 300, which ranks global private equity firms according to the amount of capital they have raised for direct investment over the five years to April 2009. This represented a move down the ranks for the firm, which took the top spot last year.