How do you make a group?

How does the Carlyle Group make money?

• I'm watching the film Fahrenheit 9-11 by Michael Moore. The movie states that the Carlyle Group, an investment firm that invested in national defense, stood to gain from the Sept 11th attacks via their investments in a subsidiary United Defense (at least I think this is what the film is saying). What is it saying about the relationship between the Carlyle Group and United Defense? How does the Carlye Group make money from investing in defense? Does it make profit because United Defense makes a profit by making weapons for the military, which wealth is spread to the Carlyle Group because United Defense is essentially borrowing money from the Carlyle Group?

• Answer:

  It's 1986 and you decide to invest in a small new company called Microsoft. You purchase a stack of stock certificates for 30 dollars a piece and over the years the stock splits and your stack gets bigger. By 2006 you're a very rich person. Its 2002 and you decide to purchase stock in an oil company called Halliburton. Basically the same story though maybe not quite as impressive. The Carlyle group is a private investment firm. They buy stocks that are not always publicly available. Some of those stocks are probably weapons manufacturers. Now if there is a war than governments buy weapons. A company that makes weapons makes money and the people who own that company, the stock holders, they make money too. But, to see this in perspective you have to see that they don't just own a little bit of stock. They own many large chunks of many entire companies. So when the government pays close to a trillion dollars for a war hundreds of billions of that go to groups like the Carlyle group. Currently they have about 147 billion in assets. The relative handful of people who make up the group of investors have a share of that 147 billion. We know war is expensive and while we tend to look at lives it is also expensive in treasure. Well the money goes somewhere don't you think?