Carlyle raises third Euro fund

Global buyout firm Carlyle Group has shaken off concerns about the “credit crunch” and raised €5.35bn for its third dedicated European buyout fund, just under three times the size of its predecessor.

Carlyle Europe Partners III (CEP III) began marketing last year and was believed to have reached the half-way stage at the beginning of this year with a reported target of €4bn.

The fund will focus on Carlyle’s core areas of aerospace, automotive and transportation, building materials, chemicals, consumer and retail, energy and power, healthcare, industrial, business services and telecoms and media.

Since setting up European operations in 1997 with offices in Paris and Munich, Carlyle has raised two previous funds. It closed its first European fund with €1bn of commitments in 1998, with Carlyle Europe Partners II garnering €1.8bn in 2005. The firm says it has invested €3.7bn of equity in 36 leveraged buyouts in Europe and returned €7.2bn to investors.

Transactions include Avio, AZ Electronic Materials, Casema, Com Hem, Ensus, Firth Rixson, Hertz, Honsel, HT Troplast, Le Figaro, Qinetiq, Medimedia, Petroplus, Saprogal and Terreal.

However, David Rubinstein, Carlyle co-founder, acknowledged the changing market conditions and said in a company 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.”

As of last month, Carlyle Group managed 55 active funds globally with US$75.6bn of commitments, and it employs more than 900 people in 21 countries (37 in Europe). In aggregate, the fund claims that its portfolio companies have more than US$87bn in revenues and employs more than 286,000 people worldwide.

Earlier this year Carlyle was linked to the auction for Virgin Media, though all has gone quiet since the debt markets have tightened.