Carlyle unveils plans for $400m mezz fund

The US private equity firm has announced plans to launch a $400m mezzanine fund focusing on US leveraged finance buyouts.

( Washington DC-based private equity colossus Carlyle Group announced plans for a $400m mezzanine fund, according to a source close to the firm.


An announcement was made earlier this week at Carlyle’s annual investor conference in Washington DC. The mezzanine fund, the first to be raised by the firm, will primarily focus on the US and will be used to finance leveraged buyouts and recapitalisations. It will also be used for “growth financing,” including lending.


Carlyle also hired three executives from Los Angeles-based investment management firm TCW Group to run the fund: Leo Helmers, Rufus Rivers, and James Shevlet. Helmers and Rivers will work in New York, and Shevlet will report from the Los Angeles office.


The news of the fund follows Monday’s announcement by financial services giant Goldman Sachs of the closing of a $2.7bn mezzanine fund. Goldman will also use the fund for financing mostly private equity deals, with the remainder set aside for loans to companies.


Most recently, Carlyle entered talks to create a private equity fund targeting Russia in partnership with Alfa Bank, the country’s largest privately owned bank. Though the firm did not confirm the details of the negotiations, various news sources reported the fund value at $500m, with each partner contributing about $250m to the effort.


With more than $13.9bn under management, The Carlyle Group invests in buyouts, real estate, high yield, and venture capital in the US, Europe, Japan, and Asia, focusing on aerospace, consumer, defence, industrial, energy, healthcare, technology, and telecommunications and media. Since 1987, the firm has invested $7.2bn and achieved a realized internal rate of return of 36 per cent. The Carlyle Group employs 510 people in 21 offices in 11 countries.