Mendoza School of Business

Okumus buys stake in Carlyle Group

Published: January 5, 2016 / Author: Thomas Heath, Washington Post



New York City-based hedge fund Okumus Fund Management has bought nearly 9 percent of the publicly traded shares of Carlyle Group, placing a big bet that the District-based public-equity firm is worth more than is reflected in its beaten-down stock price.

“It’s a very undervalued business we think we are getting at a big discount to fair value,” said Ahmet Okumus, founder of the firm. Okumus began buying Carlyle shares last month and disclosed the purchases with the Securities and Exchange Commission more than a week ago. He said he continues to buy shares.

The firm’s investment of 7.43 million shares costing approximately $124 million got Carlyle’s attention.

“When we see somebody like Okumus jump in and buy like this, we’re happy,” said Glenn Youngkin, Carlyle’s president and chief operating officer.

Closely held Carlyle Group is controlled by William E. Conway Jr., Daniel A. D’Aniello and David Rubenstein, the threesome who founded the firm in 1987.

Only 80.2 million of Carlyle’s 324 million units are traded in the public market. That means Okumus owns 8.8 percent of the shares available for public purchase, but 2.2 percent of the total.

“Carlyle should be ecstatic,” said Tim Loughran, a finance professor at the University of Notre Dame. “Somebody actually stepped up to the plate and bought a huge amount of their stock.”

Read the entire story on the Washington Post website.