Carlyle raises $13 billion for U.S. private equity fund

By Reuters

Nov 25, 2013 11:42 AM EST

Carlyle Group LP said on Monday it has finished raising money for its latest U.S. private equity fund, surpassing its initial $10 billion fundraising target by $3 billion.

The Washington, D.C.-based company, founded in 1987 by David Rubenstein, William Conway and Daniel D'Aniello, said the $13 billion Carlyle Partners VI fund attracted 269 investors from 43 countries. Carlyle and its staff invested $1 billion in the fund alongside $12 billion from outside investors.

Carlyle, which has diversified into other assets classes including corporate credit, real estate and hedge funds, had $185 billion in assets under management at the end of September, with $62.2 billion in private equity.

Nevertheless, private equity accounts for more than one-half of its profits. Out of the $627 million in Carlyle's 12-month distributable earnings to the end of September, $325 million came from private equity.Its previous U.S. buyout fund, Carlyle Partners V, was valued at 1.6 times its investors' money at the end of September. It raised $13.7 billion from investors at the onset of the latest financial crisis in 2008.

Carlyle's latest U.S. buyout fund comes amid a wider recovery in private equity fundraising, as investors look for yield amid record low interest rates. Buyout funds raised a total of $124.5 billion globally in the first nine months of 2013, up from $82.5 billion in the same period in 2012, according to Thomson Reuters data.

Some of the major private equity funds raised this year include a $11.2 billion pool by Warburg Pincus LLC for deals around the world, and KKR & Co LP's latest North American private equity fund, which is wrapping up fundraising at more than $8.3 billion.Private equity funds dedicated to the United States, however, may find it more challenging to put money to work in the short term as red-hot equity and debt markets have buoyed the price expectations of sellers and tempered leveraged buyout volumes.

Private equity-backed deals, excluding the mega buyouts of Dell Inc and Heinz that involved minority participation from private equity, totaled $131.8 billion in the United States year to date, less than the $137.2 billion over the same period last year but above the $105.5 billion over the corresponding period in 2011, according to Thomson Reuters data.

In response, Carlyle has been trying to source more deals on a proprietary basis. In September it agreed to invest $500 million for a minority stake in Beats Electronics LLC, a maker of headphones founded by rapper Dr. Dre and music producer Jimmy Iovine.

It has also stepped up efforts to attract top talent, poaching veteran dealmaker Kewsong Lee from Warburg Pincus and naming him deputy chief investment officer earlier this month. That may position him to succeed one of Carlyle's founders in the future. 

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