Wednesday’s Headlines: Private Equity Expands Beyond Leveraged Buyout

Private equity just isn’t what it used to be. A Businessweek article today points out that all but 10 of the 41 employees Carlyle recently named to managing director were outside of the buyout business, underscoring the emerging trend of private equity firms diversifying beyond their core business. Private equity firms including Blackstone are seeking to expand into other lines of business outside of their core function, as buyouts have slowed and capital is tight.

The promotions at Carlyle – which is preparing for an IPO – were in units, including real estate and mezzanine funds, while the Washington, D.C. firm recently bought Churchill Financial and other loan products to boost its lending business. Blackstone has expanded its real estate and credit businesses. Meanwhile Carlyle is moving into markets around the globe, operating 86 funds across Africa, Asia, Europe, Middle East and Americas, with plans to bump up investments in Europe and sub-Saharan Africa.

Other News:

Goldman is in talk with Chinese real estate investor Gaw Capital to sell its London headquarters for $468 million. [Reuters]

HSBC has started an auction for its Japanese consumer banking unit four years after the business opened. [Bloomberg]

Citigroup is considering additional spending cuts at its securities unit. [Bloomberg]

Morgan Stanley named 210 new managing directors, down from last year’s 232. [DealBook]

Britain’s regulators are turning their attention to bonuses at hedge funds and private equity firms. [Businessweek]

New Zealand is back on banks’ radar as the country prepares the biggest round of state asset sales in more than 20 years. [Businessweek]

Travelers Q4 profit fell 31 percent on lower investment income and a smaller benefit from reserves. [Bloomberg]

Evidence of the private equity industry’s ability to create value is surprisingly uncertain. [NY Times]

New York brokerage Ticonderoga, which employs 75, will halt operations after a failed attempt to boost capital. [Investment News]

Jamie Dimon defends big banks on Fox. [Fox Business Network]