Private Equity News & Analysis

Carlyle in talks for hedge FoF

Amid rumours of Carlyle’s IPO, K2 Advisors would be the Washington, DC firm’s third hedge fund acquisition in the past year.

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The Carlyle Group has entered talks to acquire hedge fund-of-funds K2 Advisors, sources close to the discussions told Private Equity International. 

Carlyle and K2 declined to comment.

At press time, sources close to both parties offered differing accounts as to whether the talks were occurring or not. 

The possible acquisition of K2 would continue the private equity firm’s recent strategy to expand its portfolio of financial products in preparation for a rumoured initial public offering. The firm recently picked JP Morgan Chase, Citigroup and Credit Suisse to underwrite the pending IPO, The New York Times reported.

K2 is a 17-year-old hedge fund of funds with around $10.5 billion under management, sources said.

Carlyle acquired a 55 percent stake in the Emerging Sovereign Group, an emerging markets equities firm, last week. In December, the firm purchased a controlling interest in $4.5 billion credit hedge fund Claren Road Asset Management. 

Earlier today, Carlyle completed its third deal of the month with the £1 billion acquisition of roadside assistance company RAC from Aviva, a UK insurance group. It was the firm’s eighth buyout using Carlyle Europe Partners III, a €5.4 billion buyout fund raised in 2006.