Carlyle closes €450m European CLO fund

Global private equity firm The Carlyle Group has closed its first European collateralised loan obligation (CLO) fund on €450 million ($590 million).

The closing of the fund, CELF Loan Partners BV, comes after the launch of Carlyle’s European leveraged finance business in September 2004.

The fund will be managed by the firm’s seven-strong European leveraged finance team, which has also announced the hire of Robert McPartlin as financial controller. McPartlin joins from European private equity firm BC Partners, where he had been financial controller for four years.

Hedge funds are here to stay, although their cash inflows will be more volatile. The underwriting banks recognise that our fund is a source of long-term committed capital Mike Ramsay, managing director Carlyle European leveraged finance

Commenting on the close of the fund, which is already more than 60 percent invested, managing director Mike Ramsay told PEO: “The portfolio of assets we’ve invested in are the senior secured and mezzanine debt tranches of major European LBOs.” Ramsay said that the fund’s commitments to mezzanine tranches was ahead of original projections and confirmed that the fund was structured with 8x leverage rather than 10x “to deliver stability over the long term for our investors”.

Ramsay also discussed rising costs in the marketplace: “Pricing at the top end of the market has tightened, particularly due to the amount of refinanci

Mike Ramsay

ngs taking place.”

Highlighting the increased diversity of investors looking to invest in mezzanine opportunities at the top end of the LBO marketplace, Ramsay said: “Hedge funds are here to stay,

although their cash inflows will be more volatile. The sellers of loans – the underwriting banks – recognise that our fund is a source of long-term committed capital.”

In addition to its London effort, Carlyle also has a leveraged finance team in the US, which was set up in 1998 and manages more than $3 billion globally in nine funds.