© Reuters. FILE PHOTO: A panorama of the lobby outside the Carlyle Group offices in Washington on May 3, 2012.REUTERS/Jonathan Ernst
(Correction to show initial fund size of $2.4 billion (not $2.7 billion), paragraph 3)
by Chibuike Oguh
(Reuters) – The Carlyle Group said on Wednesday it had raised $4.6 billion for its second loan fund, which provides debt financing for businesses including family-owned businesses and private equity-backed companies.
The new fund, Carlyle Credit Opportunities Fund II, surpassed its initial target of $3.5 billion, with up to $6 billion expected to be deployed given its borrowing capacity.
The fund has invested $3.8 billion of its available capital in 22 companies in North America and Europe, Alex Popov, head of illiquid credit strategy at Carlyle, said in an interview. It’s nearly double the size of the inaugural fund, which raised $2.4 billion from investors in 2019 and generated a net internal rate of return (IRR) of 15% by the end of last year.
“We continue to see significant transformational capital opportunities in today’s market,” Popov said.
He said the fund provides bridge funding for companies and businesses in the event of “major acquisitions, expansion into different markets or changes of ownership”.
Carlyle’s investments include a £320m debt financing with British coffee chain The Caffè Nero Group.Carlyle also provided funding, while FuGuo bank (NYSE: ), acquired smaller rival Signature Consultants LLC for Virginia-based outsourcing firm Digital Intelligence Systems LLC.
Carlyle is looking to strengthen its credit platform, which managed $73 billion in assets as of December. Carlyle last week struck a deal with Fortitude Re to raise $2.1 billion in equity financing for the reinsurer and manage $50 billion in assets. Carlyle also agreed to buy credit manager CBAM in March, which would add another $15 billion to its assets under management.