Carlyle Group introduces first two mutual funds

January 3
8:57 PM 2014

A regulatory filing revealed that private equity firm Carlyle Group has unveiled its first two publicly listed mutual funds, Reuters reported. The funds would enable Carlyle to offer its investment platform to retail investors.

The Carlyle Enhanced Commodity Real Return Fund will primarily look for investments in the commodity sectors as well as in energy and metals. Carlyle Global Core Allocation Fund will make investments in equities, debt, commodities, real estate and currencies through the use of exchange-traded funds. The information was revealed in a filing published by the US Securities and Exchange Commission this week.

The report said getting into mutual funds has historically been difficult for private equity companies due to the illiquid nature of the average buyout fund which typically has a life span of 10 years. However, as these companies have diversified into credit and hedge funds which are considered more liquid alternative assets, they have started to grow their investor base instead of focusing only on institutional investors.

In a Goldman Sachs financial services conference held last month, Carlyle Co-Founder and Co-CEO William Conway was quoted as saying, I do think that the retail investors are just a lot bigger pile of money than all the other piles of money we can get from investors."

Last summer, another private equity giant, Blackstone Group unveiled its first alternative investment-focused mutual fund. The fund called Blackstone Alternative Multi-Manager Fund provides exposure to troubled debt, shorting stocks and commodities speculation which are common investments of hedge funds, the report said.

In 2012, KKR & Co launched KKR Alternative High Yield, its first publicly-listed mutual fund, which invested in risky debt like junk bonds. It also launched in July last year the KKR Income Opportunities Fund, also investing in debt, its first listed closed-end fund.

The report said both Carlyle's two funds will be open-end funds, which means that there can be an indefinite number of shares in the fund which the fund company can sell. 

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