Final Close Imminent For Carlyle’s Debut Mezz Fund

Firm: The Carlyle Group

Fund: Carlyle Mezzanine Partners LP

Target: $400 million

Cap: $450 million

Timing of Close: Expected by the end of May

The Carlyle Group’s inaugural mezzanine fund, Carlyle Mezzanine Partners LP, is set to hold a final close on as much as $450 million. Multiple sources within the firm told Buyouts the close was likely to come this month.

The fund was launched with a target of $400 million, according to public filings, and held an interim close last April on $170.5 million. Searle & Co. is serving as placement agent to help market the fund.

Sources disagreed on the exact timing of the fund’s close. However, the consensus anticipates that the fund will close before the end of May. And while the fund is capped at $450 million, one source noted that it will probably come in below that figure.

A spokesperson for Carlyle declined comment.

Other mezzanine funds to close this year include Harbert Mezzanine Partners II ($233 million), Golub Capital International Ltd. ($340 million), Babson Capital Management’s Tower Square Capital Partners II ($1 billion) and York Street Mezzanine Partners II ($700 million).

The mezzanine market, having been badgered with competition from business development companies and second-lien-lending hedge funds, has been encouraged recently by the hope of rising interest rates and an anticipated market correction that some lenders say will shoo the hedge funds out of the asset class.

Lenders are expecting a pullback from the second lien market, following its explosive growth over the last two years. Meanwhile, flexibility has become a hot issue as more and more firms are expressing interest in being able to supply to all parts of the capital structure.—M.C.