Carlyle plots return to market for Europe fund

The €3.75bn Carlyle Europe Partners IV is now 82% invested, PEI has learned.

Carlyle Group is planning to return to market with a new European fund after two deals in quick succession took Fund IV to 82 percent invested, Private Equity International has learned.

Carlyle Europe Partners IV – a €3.75 billion 2014-vintage fund which includes commitments from California Public Employees’ Retirement System and Michigan State Treasury – entered into exclusive negotiations to acquire security company Præsidiad from CVC Fund VI on 18 July. This followed an agreement to acquire airfield lighting group ADB SAFEGATE for an undisclosed sum the previous day from PAI Partners.

The new investments are the 16th and 17th deals from Fund IV, a source close to the matter told PEI. The firm has had initial conversations with limited partners regarding a successor to the fund and could start raising in the fourth quarter of 2017 or Q1 next year.

The size of the new fund is unknown, but the firm’s ambitious fundraising plans – it aims to raise at least $100 billion across all its strategies in the next four years – suggest it will be larger.

“2018 will be a significant year for corporate private equity fund closes,” David Rubenstein, co-founder and co-chief executive officer at Carlyle Group, said in the firm's Q1 earnings call in May. “Private equity will comprise of a bit more than a third of our $100 billion fundraising target [over the next few years].”

As of 31 March 2017, Carlyle’s fourth European fund was being held at a multiple on invested capital of 1x, with its predecessor Funds I, II and III standing at 2.2x, 2x and 2.2x respectively, according to the firm’s public filings.

Carlyle is targeting $1 billion for Carlyle Asia Growth Partners V, which was launched in the second quarter of 2016. Capital from CAGP V will be invested in small buyouts and late-stage growth capital investments primarily in China and India, with some selected investments in South Korea.

Carlyle Group declined to comment on fundraising activity.