Carlyle takes top spot with €5.35bn European fund(2)

David Rubenstein’s fundraising machine has marched to the top of the fundraising pile with Carlyle’s latest European fund taking its global firepower to almost $25 billion.

US alternative assets manager The Carlyle Group has closed its third, dedicated European buyout fund, Carlyle Europe Partners III on €5.35 billion ($7.3 billion).

The firm had initially targeted €3 billion when it launched its fundraising a year ago.

To the end of June Carlyle had $24.7 billion dedicated to buyouts across the globe, putting it ahead of The Blackstone Group, which closed its record global fund on $21 billion.

As of 28 August, Carlyle manages 55 active funds with $75.6 billion of commitments.

The European fund will invest in companies with potential for value creation through performance improvement and organic growth, focusing on Carlyle’s core sectors. These include aerospace, automotive and transportation, building materials, chemicals, consumer and retail, business services and TMT.

Since operations began in Europe in 1997 with the opening of offices in Paris and Munich, Carlyle has raised two European funds, Carlyle Europe Partners, a €1 billion fund closed in 1998, and Carlyle Europe Partners II, a €1.8 billion fund closed in 2005.

The firm has invested €3.7 billion of equity in 36 leveraged buy-outs in Europe and returned €7.2 billion to investors, according to a statement. It has 37 investment professionals with offices spanning Europe’s key markets, including London, Paris, Munich, Barcelona and Milan.

The firm enjoyed huge profits on its controversial investment in QinetiQ, a privatisation of a UK government defence research agency, which attracted criticism after a public offering gave the measure of Carlyle’s return. The deal ignited a debate in the UK about private equity’s role in the economy, in particular when dealing with sensitive government assets.

Less controversially, last month it sold its stake in HT Troplast, a window and door company, after a two-year investment alongside Advent International.

Investments from Carlyle’s second European fund also include the buyout of UK car seat manufactruer Britax Childcare for €230 million in October 2005, and Terreal, a French tilemaker , which was acquired for €400 million and sold to LBO France for €860 million.

David Rubenstein, co-founder of The Carlyle Group, said in a statement: “The European market is maturing and the investment environment has become more challenging. However, there remain significant opportunities across the continent, and we will continue to apply our conservative philosophy and disciplined investment process in executing deals.”

The firm recently came under fire for not communicating efficiently with investors in its quoted debt vehicle, Carlyle Capital, which was forced to sell assets to cover losses in the sub-prime mortgage meltdown. Carlyle also had to lend the company $200 million to meet short-term contingencies.