Carlyle shuts offices, raises $14 billion

26 November 2008

Close on the heels of the sudden closure of its central and eastern European operations and trimming staff in the wake of the global economic slowdown, Washington DC-based private equity firm, Carlyle group, has raised $14 billion of its $15-billion fund, announced in 2007.

The US buyout fund has not yet been closed as these funds are raised in several tranches, with each tranche having its own closure before the fund can finally be closed once the entire amount has been raised.

Commentators find it remarkable that a PE fund has been able to raise such a huge amount in the current economically stressed market conditions, when the amount raised has fallen to its lowest point since the first quarter of 2005; so far 117 equity funds have raised $82.3 billion in the third quarter of 2008.

Early this week, Carlyle Group shut its Warsaw office, that had opened in August last year, to oversee its central and eastern European fund-raising efforts and axed its new Asian leveraged finance team - making it one of the first PE firms to do so - as deteriorating market conditions and investor confidence stymied its efforts to put together even a single deal.

Carlyle says it would continue to consider opportunities in emerging European markets through its €5.4 billion Carlyle Europe Partners III fund, which closed last year, or its €530 million Carlyle Europe Technology Partners II fund, which closed this month.

Last month David Rubenstein, Carlyle co-founder and managing director, was reported to have said at a conference in Dubai that private equity's finest hour was on the horizon as more capital would be deployed in emerging markets as investors had begun to shun "submerging" markets.