Carlyle raises $1.1bn for US mid-market

The firm’s latest SME-focused fund has done four deals so far and is currently 20% deployed.

The Carlyle Group has raised a $1.1 billion fund for US middle market buyout investments.

This is its first “Carlyle Equity Opportunity Fund”, which will make majority investments of between $25 million to $150 million in middle market businesses, according to a statement.

The 14-person team investing the fund is led by managing directors Rodney Cohen and Brooke Coburn, who are co-heads of Carlyle’s US middle market investment team. Cohen joined Carlyle in 2010 from mid-market firm Pegasus Capital Advisors, where he was a co-managing partner, while Coburn has been at the firm since 1996 and headed its previous mid-market funds under the “Growth Partners” umbrella. Carlyle Growth Partners III raised $605 million in 2006.

With the establishment of this Carlyle Equity Opportunity Fund, it is understood Carlyle will no longer launch funds under the Growth Partners-label, a source close to the matter said. The Carlyle Equity Opportunity Fund will have a more opportunistic mandate and will be able to target more mature businesses, rather than focus on younger companies. The source said Carlyle would focus on those “opportunities that get the best risk-adjusted returns for investors”.

Carlyle declined to comment beyond the statement.   

The “Equity Opportunity” fund, which just exceeded Carlyle’s $1 billion target, has already done four investments and is currently 20 percent deployed.

“We are gratified by the strong investor demand for this fund, particularly given the challenging fundraising market. We see incredible opportunities in this large and underserved market and have a great team to pursue them,” Cohen said in a statement.

The mid-market buyout vehicle is the latest in a series of fundraises by Carlyle. In October, the firm raised its third collateralised loan obligation (CLO) fund in the past 12 twelve months.

Carlyle ranked fifth in the 2012 PEI 300, Private Equity International’s proprietary ranking of the world’s largest private equity firms, having raised $30.74 billion through the five-year period ending in April.