Carlyle doubles fundraising in 2012(2)

The firm raised $14bn in 2012 and generated $18.7bn of carry fund realisations, just north of the $17.6bn recorded in 2011.

The Carlyle Group shrugged off the continuously challenging fundraising environment in 2012 by raising $14 billion, more than twice the $6.6 billion the firm collected in 2011, Carlyle co-chief executive officer David Rubenstein said during an earnings call Thursday.

Carlyle has collected about 60 percent of its $10 billion target for its latest US buyout fund, Carlyle Partners VI, and held first or second closes for a variety of strategies last year. The firm is in the process of raising its Asia buyout fund, Carlyle Asia Partners IV, targeting $3.5 billion; the Carlyle Global Financial Services Partners Fund II, which has a $1.1 billion target; and a global distressed/turnaround vehicle targeting $1.5 billion.

We are finally sensing that institutional LPs are at a tipping point in terms of wanting to deploy much more capital in the alternatives space

David Rubenstein

“We are finally sensing that institutional LPs are at a tipping point in terms of wanting to deploy much more capital in the alternatives space,” Rubenstein said. “Their risk appetite is increasing, and in 2012 they benefited from appreciably stronger distributions in their altenatives portfolio than in previous years.”

Carlyle’s corporate private equity funds raised $3 billion in 2012, bringing its dry powder for private equity to $17.6 billion.

Earlier this week, Carlyle held a final close on $308 million for its debut Peru fund, well over the vehicle’s $125 million target.

During Carlyle’s strong year on the fundraising trail, the firm’s carry funds invested a total of $7.9 billion. Carlyle’s carry funds – which comprise roughly half of its total assets – include vehicles that Carlyle advises as well as its buyout funds, growth capital funds, real asset funds and distressed debt and mezzanine funds but excludes structured credit funds, hedge funds and fund of funds vehicles.

“When it comes to our activity in 2012, I would say I am pleased, but not satisfied, especially with regard to our

When it comes to our activity in 2012, I would say I am pleased, but not satisfied, especially with regard to our investment pace

William Conway

investment pace,” Carlyle co-CEO William Conway said on the call, adding that the $7.9 billion the firm invested last year represents a significant drop from the $11.3 billion Carlyle invested in 2011 and is just under the average of $9 billion invested per year during the past five years.

However, Carlyle continued to branch out into new markets in 2012, completing its first investment from its Sub-Saharan Africa Fund in November by acquiring Export Trading Group, a business that supplies African agricultural products such as grains, nuts and fertiliser to farms and global consumers. The fund is targeting $500 million.

On the exit front, Carlyle generated $18.7 billion of carry fund realisations in 2012, compared to $17.6 billion in 2011. The firm’s carry funds together returned 14 percent during the year.  

While realisations were up over 2011, Carlyle’s economic net income – a measure of earnings that includes realised and unrealised investments – stood at $736 million at the end of 2012, down 28 percent year-over-year.
Corporate private equity economic income of $479 million was also down 24 percent compared to 2011.

Since its initial public offering last May, Carlyle’s share price has risen from $22 per share to nearly $34 per share.

“For those investors who participated in our IPO, a pro forma full year distribtuion produced a 7 percent annual year,” Rubenstein said on the call.

Carlyle has grown its total number of investors from around 1400 at the time of its IPO to nearly 1500 investors from 76 countries as of the end of 2012.

The firm’s $170.2 billion of assets under management are split between $53.5 billion in corporate private equity, $44.1 million in fund of funds, $40.2 billion in real assets and $32 billion in global market strategies.