NEW YORK, Sept 20 (Reuters) Private equity firm Carlyle Group said on Thursday it is selling a 7.5 percent stake in its general partnership to an Abu Dhabi investment arm in a deal worth $1.35 billion.
Carlyle said the deal represents a 10 percent ''liquidity discount'' to a $20 billion valuation. The minority stake includes no voting rights.
The Abu Dhabi entity involved is called Mubadala Development Co, an investment and development group wholly owned by the Abu Dhabi government.
Mubadala also committed $500 million to an investment fund managed by Carlyle. The deal is expected to close in October.
Washington-based Carlyle is one of the world's largest private equity firms, managing $76 billion with 55 funds.
Selling a stake to Abu Dhabi allows Carlyle to receive an infusion of cash to expand its business, to attract and retain talent and possibly prepare the firm for a public offering.
Some private equity firms took advantage of the buyout boom earlier this year to take the route to go public.
Buyout firm Blackstone Group agreed to sell a $3 billion stake of itself to the Chinese government just prior to taking 10 percent of the firm public. Rival Kohlberg Kravis Roberts&Co. filed in July to take part of itself public in an IPO worth $1.25 billion.
Carlyle Group co-founder David Rubenstein, speaking at a conference in New York on Wednesday, said that there are several reasons why buyout firms would pursue public offerings.
''Private equity firms will use stock to grow the business and make acquisitions,'' he said. ''Five years from today, all major private equity firms will be public.'' REUTERS DKS GC1859