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Carlyle eyes $1.5 bln for third financial-services fund

  • Carlyle financial-services group to launch Fund III
  • Led by John Redett and Brian Schreiber
  • Group fully or partly exited six investments last year

Carlyle Group is preparing to launch its third financial services fund, which will target as much as $1.5 billion, according to two people with knowledge of the firm.

Carlyle has not yet officially launched the fund but is expected to this year. The target is subject to change since the fund has not officially hit the market, one source said.

One of the sources, a limited partner who has heard the pitch, characterized Carlyle as “pre-marketing” Fund III.

Randy Whitestone, spokesman for Carlyle, declined to comment. The Wall Street Journal reported on the plans for Fund III earlier this month without specifying a target.

Carlyle raised its first global financial services fund in 2008, collecting about $1.1 billion. That fund was generating a 2.1x multiple and 14 percent net internal rate of return as of Dec. 31, 2016, Carlyle’s first-quarter earnings report said.

Fund II closed in 2014 on about $1 billion and was about 80 percent deployed, that earnings report said. Fund II was generating a 1.1x multiple and a 3 percent net IRR as of Dec. 31, 2016.

The financial-services team was led by Olivier Sarkozy, who joined in 2008 and left last year. Sarkozy was succeeded by John Redett and Brian Schreiber, who took over as team co-heads. Redett was a managing director at the firm, while Schreiber joined last year from AIG. Managing Director Jim Burr is also a member of the team.

Carlyle’s financial-services group realized more than $500 million from full or partial exits of six investments last year, Carlyle Co-CEO Bill Conway said during the earnings call on Feb. 8. Those exits included valuation-services firm Duff & Phelps; fund-services company Conifer Financial Services and Avalon Advisors, the WSJ reported.

Sarkozy, meanwhile, has launched his own financial-services focused-shop, Further Global. The debut fund is in market targeting $1.25 billion.

Sarkozy is working with Robert Venn, formerly of Canadian Imperial Bank of Commerce; Susan Ciccarone, formerly of Emerging Global Advisors and Goldman Sachs; and Mark Monaco, who was CFO at iPayment prior to joining Sarkozy.

Action Item: Check out Carlyle’s first-quarter earnings statement here: http://bit.ly/2kQpSjB

David Rubenstein, co-founder and co-CEO of Carlyle Group, speaks at the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2016. Photo courtesy REUTERS/Lucy Nicholson