Carlyle Expects To Hit $10B Target On Fund VI

  • Carlyle Partners VI LP hits $7B, with $10B goal within reach
  • Firm raises $4.9B in new capital in first quarter
  • Nine private equity funds in the market

“Nobody is saying it’s a walk in the woods raising money,” Carlyle Group Co-CEO David Rubenstein told investors on the firm’s first-quarter conference call. “Investors have money, they want better terms than they wanted years ago, but they are back.”

Rubenstein said the firm is “highly confident” Carlyle Partners VI LP, its flagship buyout fund, will hit its $10 billion fundraising target this year, with about $7 billion in the fund thus far.

“It’s very realistic before the next quarter that we will probably have closed on about $9 billion,” he said. “All of our major investors that we are focused on seem to be coming into the fund and we were quite happy with that.”

Carlyle Group’s hard cap on the fund is $12 billion, not counting money from insiders at the firm, who plan to contribute $1 billion, he said.

“Whether we go above the $10 billion we haven’t really decided,” Rubenstein said. “It depends on the demand and other factors.”

The fund’s predecessor, Carlyle Partners V LP, carries a vintage of 2007. It raised $13.7 billion, with a target of $15 billion. In its most recent transaction with the fund, Carlyle Group invested an undisclosed sum to purchase Syniverse Technologies LLC. Other portfolio companies in the fund include NBTY Inc., Getty Images, and HD Supply Holdings, according to data from Thomson Reuters.

Known LPs include Alaska Permanent Fund Corporation and the California Public Employees’ Retirement System.

Carlyle Group executives said the target on Carlyle Europe Partners IV LP, its newest European buyout fund, is 3 billion euros, or close to $4 billion. The firm did not mention where that effort now stands, but added it may have a first closing late this year.

“I am confident we will get to our eventual target,” Rubenstein said. “European private equity … has been challenging for everybody.”

The last of Carlyle Group’s “big three” funds is Carlyle Asia Partners IV LP, which carries a fundraising target of $3.5 billion and has raised about $1.5 billion thus far. Carlyle held a closing on that fund this year. It will start generating fees for the buyout firm on June 1. The firm expects to hit its target for the fund.

Carlyle Group has ten other funds in the market, including an energy mezzanine debt fund, which has raised $1.4 billion.

Public pension funds remain the largest single group of investors in private equity funds, but Carlyle Group is seeing a greater influx of investors from sovereign wealth funds and wealthy individuals.

“In a world of almost no return … the preferred return that’s offered by a lot of the alternative asset products is a big, big attraction for a lot of investors around the world,” said Carlyle Group Co-CEO Bill Conway. All told, Carlyle Group raised $4.9 billion in new capital in the first quarter.