Carlyle reaches $10.3bn for US fund

The firm is coming off one of its strongest fundraising periods since 2008, raising $6.9bn in Q2 and $19.7bn during the past 12 months while investing $3.8bn so far this year.

The Carlyle Group has passed the $10 billion mark for its US-focused Carlyle Partners VI, collecting $10.3 billion toward its $12 billion hard-cap. 

Fund VI “has a strong pipeline for additional commitments”, Carlyle co-chief executive officer David Rubenstein said during an earnings call Wednesday, despite having already exceeded its $10 billion target. The firm will wrap up fundraising for Fund VI during the fourth quarter. 

Carlyle’s overall fundraising pace is the “strongest it has been since 2008”, Rubenstein said, as the firm raised a total of $6.9 billion during the second quarter and $19.7 billion during the past 12 months. So far this year, Carlyle has held a first close on its third Japan fund, targeting JPY 100 billion (€769 million; $1.02 billion), and is expecting to hold a first close soon on its fourth European buyout fund, which has a €3 billion target.

“We also continue to make real progress on a number of other funds, including our new international energy fund and our fourth Asia buyout fund,” Rubenstein said, adding that the firm also held a final close for its third distressed debt fund, which had a $1.5 billion target.

Carlyle has increased its number of fundraising professionals from 60 at the the time of its initial public offering in

We also continue to make real progress on a number of other funds, including our new international energy fund and our fourth Asia buyout fund.

David Rubenstein

May 2012 to 79.

“The additions we made in 2012 were primarily to increase our focus on larger investors and sovereign wealth funds,” Rubenstein said. “In contrast, our more recent additions were primarily to increase our focus on the smaller investor segment, including high net-worth individuals and feeder funds from larger banks and private wealth organisations.”

Investment pace

On the investment front, Carlyle invested $1.3 billion from its carried interest paying funds during the quarter, more than half of which was invested outside the US. The firm has invested a total of $3.8 billion this year.

“Based upon what I see today, I expect our investment total for 2013 to be lighter than 2012,” Carlyle co-CEO Bill Conway said on the earnings call, adding that the firm recently closed one investment in Asia, announced another take-private in China and has agreed three buyouts in Europe during the last three months.

“Europe is a particularly interesting place for investing today, precisely because investment sentiment is so negative toward the region,” Conway said. “However, the overall investment environment has grown more challenging, particularly in the US for large transactions.”

So far during the the third quarter, Carlyle has completed its acquisition of a remaining 40 percent stake in fund of funds AlpInvest.

“AlpInvest continues to receive new mandates across its platform and is expecting to complete closing on commitments for the secondary program, which, when combined with the earlier closes, will total approximately €3.5 billion,” Rubenstein said.

Fund appreciation

Carlyle’s corporate private equity funds appreciated by 5 percent during the second quarter, while its global market strategies funds increased 8 percent and real assets funds declined 2 percent, compared to the prior quarter. Carlyle’s total carry fund appreciation stands at 16 percent during the last 12 months, compared to 9 percent during the previous 12-month period.

Our investment teams are executing as they should, building value across our portfolio and taking advantage of high asset pricing by exiting.

Bill Conway

Carlyle’s corporate private equity generated economic net income – a measure of earnings that includes realised and unrealised investments – of $106 million for the second quarter, compared to a loss of $65 million for the same period last year, and generated $645 million of ENI during the past 12 months.

“Although our investment pipeline is weaker than I would have expected, our investment teams are executing as they should, building value across our portfolio and taking advantage of high asset pricing by exiting,” Conway said.

“Our US buyout portfolio, which is by far our largest business, is as well positioned as it has been in our 26-year history.” 

Carlyle grew its total assets under management to a record $180.4 billion during the quarter, split between $57.9 billion in corporate private equity, $34 billion in global market strategies, $39.8 billion in real assets and $48 billion in fund of funds.