Buyout Concern Raises $7.85 Billion
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Carlyle Group, an 18-year-old investment firm whose former advisers include George H.W. Bush, raised $7.85 billion for the world’s biggest buyout fund.
Carlyle’s fund eclipsed the $6.45 billion that New York-based Blackstone Group LP attracted in 2002. Blackstone, along with competitor Warburg Pincus LLC, are seeking more than $8 billion apiece for new funds.
“It’s certainly the trend that funds are getting bigger,” said Erik Hirsch, chief investment officer for Hamilton Lane Advisers in the Philadelphia suburb of Bala Cynwyd, Pa., which invests in private equity funds.
Buyout firms, which finance corporate takeovers mostly with borrowed money, spent a record $180 billion on acquisitions last year. The pace accelerated in the first quarter, led by the $10.4 billion takeover of American software developer SunGard Data Systems by seven firms, including Blackstone and Kohlberg Kravis Roberts & Company. Carlyle wasn’t part of the group.
“There are attractive buyout opportunities throughout the U.S.,” said a managing director of Washington based Carlyle, Allan Holt, in an emailed statement yesterday.
The Carlyle Partners IV fund will acquire American companies in industries ranging from defense to telecommunications. Since its founding, Carlyle has spent $13 billion of equity to acquire stakes in 377 companies, including Dex Media, an American publisher of telephone directories, and United Defense Industries, maker of the Bradley Fighting Vehicle.
Carlyle separately gathered $2.2 billion to make acquisitions in Europe, the company said in the statement. While Carlyle’s new American fund took six months to raise, the European fund, which had a target of $2.6 billion, took about two years.
“We expect the next few years to be challenging and we will redouble our efforts to match our past success,” Carlyle co-founder William Conway, 55, said in the statement.
Mr. Conway, a former chief financial officer of MCI Communications, founded Carlyle in 1987 with David Rubenstein, 55, a lawyer and former aide to President Carter, and former Marriott executive Daniel D’Aniello.
