avatar
Finance

Carlyle’s Fundraising Tear


Never one to sit still, private equity giant Carlyle Group is seeking to raise a $15-billion fund aimed at U.S. buyouts.

The news came on the heels of Carlyle’s latest big buyout, joined by Providence Equity Partners, a $1.3-billion acquisition of Open Solutions, based in Glastonbury, Connecticut.

Glastonbury, Connecticut

If Carlyle succeeds in this latest fund, it will close to double its buyout war chest.It last raised $7.85 billion for its second U.S. buyout fund in 2004, and it has put in play about 60 percent of that capital, according to industry sources.

U.S.

It will also put the firm on par with mega funds that raised funds this past summer, including Blackstone Group, which raised $15.6 billion for buyouts in July, and Texas Pacific Group, which raised $14 billion the same month.

There has been a feeding frenzy of late, and technology companies are on the menu.

Thus far private equity and management buyouts have put up $27 billion to purchase companies, up from $22 billion for 2005.Carlyle, Blackstone, and TPG in September put up $17.6 billion to buy Freescale Semiconductor—the largest tech buyout on record.

Carlyle isn’t merely content to set its sights on U.S. buyouts, either. The group is looking overseas for similar opportunities. It is preparing to close a European buyout fund, capped at $3.76 billion. In July, it raised $1.8 billion for its second Asia buyout fund.

Asia

Carlyle’s quest for Asian opportunities is gaining pace. Over the past year, the firm has raised a total of $4.8 billion for buyout, growth capital, and real estate investments for the region. Those include Carlyle Japan Partners II at $1.9 billion, Carlyle Asia Growth Partners III at $668 million, and Carlyle Asia Real Estate Partners at $410 million.

To date, Carlyle maintains 42 separate funds aimed at different geographies and markets.

Carlyle representative Chris Ullman declined comment on the current fundraising effort for regulatory reasons.

Thomson Financial data indicates that limited partners are continuing to favor buyout funds as an asset class­.

data indicates that limited partners are continuing to favor buyout funds as an asset class­.

In the third quarter of 2006, 32 buyout and mezzanine firms raised $22.8 billion. That was down from the prior quarter when 41 firms raising $35.3 billion. In the third quarter of 2005, 63 firms raised $22.4 billion. Year to date, 103 firms have raised $83.9 billion for buyouts, just $13 billion shy of 2005 levels, widely regarded as the best year for buyouts since 2000.

“Whether we fall a little short in 2006, or beat it doesn’t really matter all that much. If we’re talking about 2005, that was an awesome year for fundraising,” noted Thomson analyst Bob Kaiser. “But if we come in anywhere near last year’s levels, private equity is still raising a tremendous amount of capital.”

Contact the writer:SWolfe@RedHerring.com