Carlyle raising new $1.5bn debt fund

Fresno, California public pension has already committed $150m to the new fund.

The Carlyle Group has started to raise capital for its new lending fund focused on mid-market companies in the US, Private Debt Investor has learned.

The Carlyle Middle Market Fund has a $1.5 billion fundraising target, according to sources familiar with the matter. The firm initiated the fund this February.

A Carlyle spokesman declined to comment.

The fund has already garnered a $150 million commitment from the Fresno County Employees Retirement System, a memorandum to the pension board this month shows.

The Middle Market Fund has a three-year investment period and a seven-year term, according to the Fresno, California-based pension fund's documents. The fund targets 40 percent to 60 percent senior loans and 30 to 50 percent second lien or unitranche loans with a 1:1 leverage ratio.

The fund has a management fee set at 1.25 percent on drawn equity, an incentive fee of 15 percent, and a 7 percent hurdle.

At its February meeting, the board approved the fund commitment, along with an additional $150 million separate account with Carlyle focusing on senior secured loans, the document shows.

The story was first reported in Buyouts.

The Middle Market Fund is at least the second fund Carlyle has initiated recently. As PDI reported last month, Carlyle has raised $125 million for a new co-investment vehicle CSP IV Co-investment this year.

That vehicle will run as a parallel fund alongside its fourth special situations fund, which closed on a $2.5 billion in capital commitments in February.

The Washington, DC-based firm's private debt strategies include global distressed credit, mezzanine loans and energy-focused funds as well as its collateralised loan obligation business and business development company.

The Carlyle Group has $158 billion of assets under management across 281 investment vehicles as of 31 December, according to a company statement.