CARLYLE RAISES $13 BILLION FOR U.S. BUYOUTS
c.2013 New York Times News Service
The Carlyle Group has a new $13 billion war chest for leveraged buyouts in the U.S.
The alternative investment firm said on Monday that it had raised its sixth fund dedicated to buyouts and other private equity investments in the U.S. — its first such fund since 2008. The $13 billion fund surpassed a $10 billion goal the firm set when it began seeking capital in late 2011.
“We are grateful for the support of our fund investors, many of whom are repeat investors,” Allan Holt, co-head of Carlyle’s U.S. buyout group, said in a statement. “We will take good care of their money as we work to invest wisely and create value.”
The new fund, called Carlyle Partners VI, shows Carlyle’s commitment to its bread-and-butter business of private equity, even as it has expanded in areas like hedge funds and real estate. The firm and its employees and advisers contributed $1 billion of capital to the fund, Carlyle said.
And yet, even in its core business, Carlyle is trying new things. The firm, best known for its buyouts, recently made a minority investment in Beats Electronics, which makes colorful, expensive headphones. On Monday, Carlyle said it would continue to do minority investments out of its new fund.
Even as it raises new money, Carlyle is preparing to harvest some of its earlier investments. The firm has been “working on a number of exits that are likely to produce healthy performance fees in the near term,” David M. Rubenstein, Carlyle’s co-chief executive, said this month on a conference call to discuss third-quarter earnings.
Those results reflected the cyclical nature of private equity. Carlyle said it earned $195 million before taxes in the third quarter, a decline of 11 percent from the period a year earlier, amid a slow period in selling its investments.
But big investors, known as limited partners, continue to show faith in Carlyle’s ability to deliver outsize returns. Carlyle said that 269 investors from 43 countries committed money to the new fund.
Carlyle’s previous U.S. buyout fund, which closed at the end of 2008, had $13.7 billion to work with. In addition to Beats, that fund invested in Booz Allen Hamilton and Axalta Coating Systems, formerly known as DuPont Performance Coatings.