New €500m European debt fund for Carlyle

Carlyle Group, the Washington DC-based private equity firm, is launching a new European leveraged finance fund to invest in senior and mezzanine loans and high yield.

A new European leveraged finance fund has been launched by Carlyle Group, the US-based global buyout firm. A source close to the firm said the fund would have €500 million ($613 million) of capital to invest.

The new business will be spearheaded by managing director Mike Ramsay, who was formerly head of leveraged finance at Prudential M&G and has worked in the European debt markets for the last ten years. He will take up the post in late September and will be based in Carlyle’s London office.

Bank of Scotland Corporate is a strategic investor in the fund, while JP Morgan is serving as an arranger.

Carlyle Group has had a leveraged finance business in the US since 1999 and manages $3 billion of assets committed to leveraged loans, high yield bonds and special situation investments in six collateralised debt obligation funds (CDOs).

“There is great opportunity in the European debt markets,” said Mike Zupon, managing director and head of the leveraged finance group. “We look forward to working with Bank of Scotland Corporate. Their expertise in Europe complements our experience managing US high yield assets and European private equity businesses.”

In 2000, London-based private equity firm Duke Street Capital launched Duke Street Capital Debt Management (DSCDM) to invest in CDOs backed by European senior and mezzanine loans and high yield bonds. But DSCDM’s capital requirements became too large to be funded from the parent company’s balance sheet and in March 2004 it was sold to US investment manager David L Babson & Company for a sum reported by sources to be at least €60 million.