Firm: The Carlyle Group LP
Fund: Carlyle Global Financial Services Partners II
Amount Raised: $1 billion
While a few smaller private equity firms also run funds dedicated solely to financial companies, Carlyle is the only one among the major buyout firms to do so, sister news service Reuters reported. Carlyle first’s financial companies fund, launched in 2008, raised $1.1 billion.
Financial regulations implemented in the aftermath of the financial crisis have created opportunities for private equity funds to buy assets both in Europe and the United States. For example, Carlyle acquired TCW Group Inc, a $127 billion Los Angeles-based asset manager, from Societe Generale two years ago, as the French bank sought to bolster its balance sheet.
Yet, by industry standards, the relatively long fundraising period of the latest fund, called Carlyle Global Financial Services Partners II, shows that some investors are still skeptical about the size of the opportunity and the challenges involved.
Carlyle’s first financial companies fund had generated 1.6x its investors’ money and an 18 percent internal rate of return on a gross basis as of the end of March. Carlyle’s current portfolio of fully invested private equity funds had generated, on average, 2x its money and a 26 percent IRR over the same period on a gross basis.
Investments of Carlyle’s first financial companies fund include investment bank and brokerage Sandler O’Neill & Partners LP, Florida bank BankUnited Inc and Boston-based asset manager Boston Private Financial Holdings Inc. Carlyle’s financial companies investment team is run by Olivier Sarkozy, half-brother of former French President Nicolas Sarkozy.
Washington, D.C.-based Carlyle had $198.9 billion in assets under management as of the end of March, $64.5 billion of which were in private equity.
Greg Roumeliotis is a correspondent for Reuters in New York.