The buyouts house raised US$500m for its first ever Middle East and North Africa (MENA) fund, and US$553m for its second mezzanine vehicle.
The MENA offering will target companies operating in a range of sectors, with particular attention to those in the energy, financial services, healthcare, industrial, infrastructure, technology and transportation markets.
Carlyle has had a regional team since March 2007, and already operates from three offices in the region – Cairo, Dubai and Istanbul. The 12-strong investment group has made one investment to date, acquiring a 50% stake in TVK Gemi Yapim Sanayi ve Ticaret A.S., a Turkish shipbuilder, in July 2008.
Walid Musallam, Carlyle’s MENA head and managing director, said: “The current market environment represents an opportunity for experienced investors to deploy capital at significantly more favorable valuations than existed last year. We believe we are well placed to capitalize on opportunities that offer considerable returns for our investors while minimizing downside risk. We have an excellent team of investment professionals with exceptional standards of training and experience and unparalleled insight into the markets.”
Carlyle is the first of the global private equity giants to have set up a fund specifically aimed at the MENA region, although others players are interested in creating a presence there. In September last year fellow US buyouts group KKR appointed Makram Azar as its MENA head and is due to open a Middle Eastern office soon.
Carlyle Mezzanine Partners (CMP) II’s final closing of US$553m fell short of its original US$600m target.
It will invest US$15m to US$50m per transaction in the debt and equity securities of companies with revenue between US$50m and US$1bn. CMP invests in middle market companies through junior debt and minority equity securities in leveraged buyouts, recapitalisations and growth financing.
Co-head of Carlyle Mezzanine Partners, Leo A. Helmers, said: “The lack of debt financing alternatives in the market provides CMP an opportunity to get very high risk-adjusted returns in its mezzanine portfolio.”
Reflecting the all but stagnant buyout market, the Washington DC-based buyout firm recently wrote down the value of the investments in its buyout fund Carlyle Partners IV by 13.8% during the fourth quarter of 2008, according to Reuters.