Carlyle Ireland spin-out seeks around €200m for debut fund – updated

Melior Equity Partners, founded by Carlyle managing directors Jonathan Cosgrave and Peter Garvey, will begin raising capital early next year.

Melior Equity Partners, the spin-out from Carlyle Group‘s Ireland team, wants to raise approximately €200 million for its debut fund.

Carlyle managing directors Peter Garvey and Jonathan Cosgrave set up the firm in July and will begin raising capital at the beginning of 2020, a source with knowledge of the fundraise told Private Equity International. Three other Carlyle investment professionals have joined Melior, the source added.

The Times first reported the spin-out.

The fund will focus on the Irish mid-market when Carlyle Cardinal Ireland – a joint venture between Carlyle and Dublin-based mid-market firm Cardinal Capital Group that was set up in 2014 – finishes its investment period in December.

The JV raised €292 million, against a €300 million target, in 2014 for Carlyle Cardinal Ireland Fund, according to PEI data.

Capital from the CCI fund has been invested in 11 mid-market companies, of which three have been exited thus far, according to Carlyle’s website: confectioner Lily O’Brien’s, security company GSLS and payment solutions company Payzone. CCI typically invested between €5 million and €50 million in healthcare, consumer, technology, and business and financial services companies.

Melior will no longer have any link with Cardinal, according to a separate source with knowledge of the spin-out.

A third source noted Carlyle and Cardinal had only planned a single fund when they entered into the partnership five years ago.

Irish sovereign wealth fund Ireland Strategic Fund and Enterprise Ireland are investors in CCI, according to PEI data.

PEI understands that Carlyle and Cardinal will manage existing investments in the fund.

Cardinal, which launched Ireland’s first real estate mezzanine finance fund in 2015, is also understood to be mulling its own private equity fund focused on the country’s mid-market. The firm is targeting a slightly larger fund than CCI and is in early discussions with LPs, PEI understands.

Melior, Carlyle and Cardinal declined to comment.

– This story has been amended to show that Carlyle is not funding Melior’s vehicle.