Carlyle running ahead of fundraising target for 2014

  • Raises $5.5 billion in Q1, ahead of $4.7 billion year ago
  • Seeing ”enormous demand” for international energy fund
  • Carlyle Asia Partners IV may exceed target

“I don’t want to say we are ahead, we are pretty good shape,”  David Rubenstein, Carlyle Group’s co-CEO, said in response to an analyst’s observation that the firm appears to be running ahead of pace for its fundraising efforts. “We did $22 billion last year, I think we projected we would do around $20 billion this year, but I think we may well do more but I don’t want to guarantee it.”

Carlyle surpassed its year-ago fundraising tally of $4.7 billion in the year-ago first quarter, when the firm was on track to raise $13 billion for Carlyle Partners VI LP.

Rubenstein said Carlyle Group is seeing “enormous demand” for Carlyle International Energy Partners LP, partly because “it’s somewhat unique because there aren’t a lot of international energy funds.”

Carlyle Realty Partners VII LP, which has disclosed $1.1 billion in commitments, is “meeting strong demand as well,” he said. That fund held its first close during the quarter at more than a third of its target, which has not been disclosed.

Carlyle Asia Partners IV LP may exceed Carlyle’s target, he said. The fund’s goal is listed as $3.5 billion in a Form D filing. Rubenstein also said Carlyle Europe Partners IV LP is “going to do well in the market.” The disclosed target of that fund is $4 billion.

During the quarter, Carlyle also announced a final close of Carlyle Sub-Saharan African Fund at $698 million, nearly $200 million above its initial $500 million target.

All told, Carlyle held interim closings for nine funds. In addition, Carlyle’s energy partner, NGP Energy Capital Management LLC, has launched fundraising efforts around NGP Natural Resources XI. Separately, Carlyle said it plans in coming months to exercise an option to purchase 40 percent of the carry of NGP Natural Resources X LP and all future NGP funds. The cost of exercising the options will be about $100 million.

“We’re obviously pleased to see continued investor interest in and support for a variety of Carlyle products,” Rubenstein said. “We routinely have a large number of new funds in the market [and] our goal is to offer our fund investors a wide variety of strategies they can choose to pursue depending on their own needs.”

Carlyle reiterated that 60 percent of its capital comes from investors in six or more of its funds, and “as a result we find going back to investors going with us is very productive,” Rubenstein said.

On the regulatory front, Carlyle said the Securities and Exchange Commission’s probe into review of transaction and portfolio advisory fees is not a concern. “I worry about a lot of things, but that’s not one of them,” said Carlyle Co-CEO Bill Conway, who pointed out the firm reviews its fees structure regularly with LPs.

While Carlyle said it continues to work on “a lot of things” to shape products for retail investors, executives did not mention any specific plans. Rubenstein said it will take time to roll out new products. He did not comment on a recent report on a plan by Nasdaq to work on a way for retail investors to purchase interests in private equity funds.