Carlyle relives boom years with $13bn fundraising

The Carlyle Group has underlined the return of the large buyout funds that were a trademark of the boom years after it secured $13bn for its flagship North American vehicle.

The fund, which will focus on corporate leveraged buyouts and strategic minority investments in the US, has attracted about a third more than it initially sought. It includes $1bn from Carlyle itself, its senior professionals and other executives, the Washington-based group said on Monday.

The end result compares with $13.7bn raised by the group for US deals at the end of 2008 and $7.8bn in 2005.

Carlyle follows Warburg Pincus, Silver Lake, CVC Capital Partners and Advent International in securing more than $10bn in private equity funds as investors gradually commit more money to new pools after distributions from previous ones picked up. Private equity groups have raised $279bn so far this year, topping the amount raised for the whole of last year, according to data compiled by Preqin.

This is still 44 per cent less than investors pledged in 2008, the peak of the private equity fundraising market, on the eve of the global financial crisis. Investors, still cash constrained by poorer distributions than expected in the years that have followed the crash, are pickier, choosing to back fewer managers.

It took Carlyle, its fundraising partner David Rubenstein and 269 investors from 43 countries two years to close the fund, which had a $10bn initial target. This compares with the seven months it took CVC to raise €10.5bn this year and less than a year for Advent the year before.

Allan Holt, co-head of the US buyout group, said: “We are grateful for the support of our fund investors, many of whom are repeat investors . . . We will take good care of their money as we work to invest wisely and create value.”

Carlyle’s 2008 and 2005 funds were both returning 13 per cent per year after fees as of September. The group is also seeking €3bn for European buyouts. Previous US investments include Axalta Coating Systems, (the former DuPont Performance Coatings), Booz Allen Hamilton and Pharmaceutical Product Development.

The corporate buyout unit is an increasingly smaller part of Carlyle’s activity on a relative basis as the group diversifies into other products. The company, which went public last year, has about $62bn of corporate buyout assets under management, out of $185bn in total.

Apollo, the New York-based private equity investor co-founded by Leon Black, has amassed $12bn so far for a global pool, which has a cap of $15bn, while KKR is seeking $10bn for a North American fund. Warburg secured $11.2bn and Silver Lake closed on $10.3bn earlier this year.

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