Could Personal Connections between Blackstone and Carlyle Serve to Forge Buyout Deals?

(NewsVisual, powered by IntellectSpace) -- The New York Times DealBook reported on Tuesday the conference in Munich, Germany of the world’s leading private equity firms that the firms will see more modest deals in the near future, such as “far more equity deals with minority stakes” and “far fewer, if any, leveraged buyouts.”

Yet it’s also possible that the firms could join forces or capital with one another to initiate major buyouts.

NewsVisual created an IntellectSpace Knowledge Map that demonstrates a plethora of potential deal-making connections between firms that the Times article excludes from consideration (see the DealBook article by Rhea Wessel ).

The Knowledge Map illustrates the following possibilities:

Although the private equity-titans the Blackstone Group and the Carlyle Group LLC could be considered competitors of sorts, as DealBook article implies, there does exist a web of high-level personal connections between these two firms that make collaborations or deals between them conceivable.

All of the personal connections between these two firms run through renowned nonprofit institutions, including Harvard University and Oxford University.

The strongest nexus of personal connections, however, evidently exists through the Council on Foreign Relations.  Note the following:

Blackstone CEO/Chairman Stephen A Schwarzman, Senior Chairman Peter G Peterson, and Director The Right Honorable Brian Mulroney, a former Prime Minister of Canada, are all connected through the Council on Foreign Relations to the Carlyle Group Chairman Louis V. Gerstner Jr.

The affiliations illustrated by the Map to these two firms and to the Council are all current.

Therefore, it’s highly probably that they are well acquainted with one another, and it’s indeed possible that these relationships could serve as a springboard for negotiating agreements between the firms.

In addition, there exist other sets of connections that, though less probable, could serve as a conduit for talks concerning a deal.

For example, Blackstone COO/President Hamilton E James is connected through Harvard Business School to Carlyle Group Principle Stephen W Wise, where both men earned MBA degrees; and James is also tied via Harvard College to the Carlyle Managing Director Robert E Grady.

Although it seems unlikely that they would all know one another via either school at Harvard, it’s within the realm of possibility that all three of them, or at least two of them, are acquainted through the University.

Likewise, although Carlyle Principle Richard L Chang has a once-removed connection through Oxford University, where he earned a Masters degree, to Director Lord Nathanial Charles Jacob Rothschild, this connection doesn’t appear to be very strong.  Rothschild’s ties to Oxford University are as a trustee, making it unlikely that he would be acquainted with Chang through that institution.

Still, one cannot completely negate the possibility that they know each other through Oxford.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).

Click here or copy this link into your Internet Explorer browser for an interactive version of this IntellectSpace Knowledge Map.