27/09/2022

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Exclusive-Carlyle Raises $4.6 Billion For Second Credit Fund

Carlyle Group Inc said on Wednesday it has raised $4.6 billion for its second credit fund that provides debt financing to companies, including family-owned businesses and private equity-backed firms.

The new fund, Carlyle Credit Opportunities Fund II, exceeded its initial target of $3.5 billion and is expected have up to $6 billion to deploy when accounting for its ability to borrow.

The fund has already invested $3.8 billion of its available capital in 22 businesses across North America and Europe, Alex Popov, Carlyle’s head of illiquid credit strategies, said in an interview. It is nearly double the size of the inaugural fund, which collected $2.7 billion from investors in 2019 and had generated a net internal rate of return (IRR) of 15% as of the end of last year.

“We are continuing to see significant transitional capital opportunities in the current market,” Popov said.

The fund provides transitional capital for companies and businesses for circumstances including “a major acquisition, expansion into a different market, or a change of ownership,” he said.

Carlyle’s investments include a 320 million pounds debt financing package to The Caff? Nero Group, a British coffee chain. Carlyle also provided financing, alongside Wells Fargo, for Digital Intelligence Systems LLC, a Virgina-based outsourcing firm, to acquire a smaller rival, Signature Consultants LLC.

Carlyle has been seeking to bolster its credit platform, which had $73 billion in assets under management as of December. Last week, Carlyle reached a deal with Fortitude Re to raise $2.1 billion in equity financing for the reinsurer and manage $50 billion of its assets. Carlyle also agreed to acquire credit manager CBAM in March, which will add an additional $15 billion to its assets under management.

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