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American International Group (NYSE: AIG), once the world's largest insurer, is selling assets outside the U.S. to repay a government bailout. The Carlyle Group, KKR, JC Flowers, and other U.S. private equity firms and Asian financial groups are reported to be interested in AIG's Taiwanese unit Nan Shan Life Insurance Co.

"Everyone hopes this is going to be a fire sale as AIG is in a difficult situation," said a local partner of Standard & Poor's.

The Carlyle Group, which is an $85 billion private equity powerhouse, recently published its annual report. It's a sobering document.

However, there are some interesting tidbits. For example, despite the financial turmoil -- where three deals went bust -- Carlyle was still able to raise $19.9 billion. What's more, the firm invested $12.6 billion in equity last year.

What about the future? Well, Carlyle's co-founder, David Rubenstein, who gave a presentation at the Aspen Global Leadership Network conference, offered some insight on what's ahead, as reported by BusinessWeek.

The FDIC found buyers for Atlanta's failed bankers' bank, Silverton, but none of Silverton's suitors wanted to pay enough for it. After analyzing the offers, the FDIC decided it would be less costly to shut the bank down than to accept the bids received.

Bidders included the Carlyle Group with a consortium of private equity investors, including Lightyear Capital, Harvest Partners, and Colony Capital. "We have to do what is least costly to our insurance fund and to shut it down for good was less costly than the bids we received," a spokesman for the FDIC told the Financial Times.

Not long ago, the private equity firm, Fortress Investment Group LLC (NYSE: FIG), appeared to be in deep trouble. But things are looking better now, as the stock price has gone from $1 to $4.65 this year.

In fact, Fortress is now pulling the trigger on some deals. Just this week, the firm teamed up with Crestview Partners LP and Lightyear Capital LLC to invest $450 million in First Southern Bancorp (Lightyear is operated by Donald Marron, who was the former chief of PaineWebber Group).

Regulators have seized BankUnited (NASDAQ: BKUNA), Florida's largest bank, and sold its deposits to a consortium of private equity funds, marking it the largest bank to fail so far this year.

BankUnited's failure will cost the Federal Deposit Insurance Corp. some $4.9 billion, the agency said in a statement. The bank boasted $12.8 billion in assets and $8.6 billion in deposits, according to the FDIC.

In what could be the most watched private equity deal of the year, a consortium of buyout firms led by billionaire investor Wilbur L. Ross has set its sights on BankUnited Financial Corp. (NASDAQ: BKUNA), says the Wall Street Journal (subscription required). The consortium includes Carlyle Group and Blackstone Group (NYSE: BX).

Earlier this year, federal regulators declared that the Florida-based lender was "critically undercapitalized" and demanded that it find a buyer or raise new capital. While regulators have traditionally favored other lenders in sales of banks, if Ross's group is successful, it would not only be one of the largest acquisitions in the financial-services sector made by private equity, but could also signal a shift in the government's attitude toward private-equity buyers of banks.

In order to end the two-year-old inquiry by New York Attorney General Andrew M. Cuomo into its pension business, the Carlyle Group has agreed to pay $20 million and make broad changes to its practices. Carlyle, one of the world's largest private equity firms, will no longer use intermediaries, known as placement agents, to secure investment business from public pension funds, and it will curb its campaign contributions to elected officials who oversee pension funds.

"This is a revolutionary agreement," Cuomo said Thursday. "I believe it totally changes the way people operate: It ends pay-to-play, it bans the selling of access, it puts the political power brokers out of business."

In the middle of 2007, the private equity industry started to crumble as the credit crunch shocked the U.S. financial system. Since then, it's been particularly tough for deal makers.

Yet, according to a cover article in BusinessWeek, the good days may be here again. In fact, private equity may even help the economy out of its funk.

Private equity powerhouse, The Carlyle Group, has more than 500 investment professionals across 21 countries. Of course, some of them are corporate luminaries like Louis Gerstner.

Well, after being the chairman of Carlyle since 2003, he is now departing -- his last day will be September 30th. Although, he will remain as a Senior Advisor to the firm.

Gerstner has had a stellar career. In 1993, he took the challenge of becoming IBM's (NYSE: IBM) chairman. At the time, the company was crumbling.

Despite not having much tech experience, Gerstner set forth an ambitious strategy that not only saved IBM but returned the company to greatness. He even wrote a book about his experience in a book called Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change, which is definitely worth reading.

Before his tenure at IBM, Gerstner was the CEO of RJR Nabisco, where he had to deal with the debt-load from a mega leveraged buyout (from KKR). He was also the president of American Express (NYSE: AXP) and a director of management at McKinsey & Co., Inc.

While at Carlyle, Gerstner made a big impact. He helped globalize the firm as well as diversify the investment base. As of now, Carlyle manages about $75 billion in assets across 57 funds and controls a portfolio that has aggregate revenues of $87 billion.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

As seen recently with the quarterly reports of the Blackstone Group LLP (NYSE: BX) and Fortress Investment Group (NYSE: FIG), the private equity world is having a hard time exiting investments. As a result, its returns are fairly muted.

That's why the recent announcement from the Carlyle Group is important. That is, the firm has sold John Maneely Co. to Novolipetsk Steel, Russia's #4 steel maker, for $3.53 billion.

Essentially, Novolipetsk sees this deal as a way to bolster its presence in the US market, especially in the pipe and tube markets. In fact, such things are fairly profitable because of recent shortages, largely due to energy costs.

As for Carlyle, the deal is a nice score. After all, the firm invested $550 million in 2006 for several companies which ultimately turned into John Maneely. This transaction will also be lucrative for a group of investment banks -- like Merrill Lynch (NYSE: MER), Deutsche Bank and Societe Generale -- that will provide the necessary debt financing.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

When the Carlyle Group got its start in the late 1980s, the founders leveraged their extensive political backgrounds. It was certainly smart as the private equity firm struck some key deals (especially in the defense area).

Well, Carlyle is using its political savvy once again. This time, the firm wants to take advantage of the distressed valuations in the banking sector.

Basically, there is a complex set of regulations that make it extremely difficult for private equity firms to invest in banks. For example, there is an equity cap of 25% (which is often lower if the private equity firm wants more control).

So, in the Wall Street Journal, the Carlyle Managing Directors, Olivier Sarkozy and Randal Quarles, weighed in with an opinion piece.

The essential argument: the regulations are outmoded.

In fact, the rules may make our financial system weaker since there is tougher access to much-needed capital. After all, it seems that every day there is another bank that needs huge amounts of capital.

No doubt, Carlyle is being self-serving, and it will probably make a fortune from the regulatory changes.

At the same time, capitalism can be a powerful tool, and as a result, move things in the right direction. With $400 billion available in the coffers of private equity funds, this could be a big help to repair the big problems in the banking sector.

Interestingly enough, the issue appears to have some traction. According to a recent Wall Street Journal story, it looks like the Federal Reserve is thinking about relaxing some of the rules.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

It's hard to believe, but the credit crunch is getting close to a year old. When it first hit, the result was stunning as pending deals came under much pressure, such as with price renegotiations, litigation and abandonments. There was also an evaporation of mega deals.

However, lately there are signs that buyouts are making a comeback. A recent example is Carlyle's $2.54 purchase of the government business of Booz Allen Hamilton.

But that's not enough to support the heavy dealmaking infrastructure on Wall Street. As a result, we are now seeing some major layoffs as well as the departures of key players.

For example, according to a piece in Bloomberg.com, the co-head of leveraged finance at Morgan Stanley (NYSE: MS), Ashok Nayyar, has left the firm. And the global leveraged finance chief at Deutsche Bank AG, Michael Paasche, is also leaving.

Of course, this doesn't mean that leveraged finance will go away. If anything, major private equity firms will likely bolster their own platforms. Or, we may see other banks entry the fray, such as Barclays Capital (NYSE: BCS).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

About a year ago, the rage in private equity was the so-called megabuyout. It seemed like no company was immune. There was even talk of $100 billion dollar deals.

Of course, the credit crunch ended the megabuyout. In fact, it ended most of the activity for private equity folks.

Yet, according to the co-founder of the Carlyle Group, David Rubenstein, things are perking up [subscription required]. His firm – like other veterans, such as The Blackstone Group (NYSE: BX) – understands market cycles. After all, these players have dealt with variety of credit crunches, such as in 1991-1992, 1998 and 2001-2002.

Rubenstein predicts we'll see a pick-up in deals over the next few months. Although, the deals are likely to range from $2 billion to $4 billion, with less debt. And expect more foreign deals.

Funny enough, Rubenstein seems to be leading the charge with its recently announced a $2.54 billion deal for a majority stake in Booz Allen Hamilton.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.