US buyout firm The Carlyle Group has closed its third fund in four weeks, this time a $605 million (€427 million), US-focussed venture fund that is roughly the same size as its 2002 predecessor. Last month, Carlyle closed a record-setting €5.35 billion European buyout fund as well as a $3 billion US real estate fund.
The concept is to try to marry the hands-on approach of venture capital and people investing locally and investing in domains they know, with the power and scale that comes from having a global platform.
Carlyle Venture Partners III is $3 million larger than the venture arm’s second US fund, which closed on $602 million in 2002.
“As traditional buyout funds have gotten significantly larger, there is an attractive opportunity to acquire growing businesses using modest leverage in a way that provides an attractive risk-reward trade-off for investors and that is consistent with Carlyle’s historic strength in small buyouts,” Brooke Coburn, who co-heads Carlyle Venture Partners with Robert Grady, said in a statement.
Grady recently told sister publication Private Equity International that Carlyle’s venture thesis relies on the firm's private equity roots. “The concept is to try to marry the hands-on approach of venture capital and people investing locally and investing in domains they know, with the power and scale that comes from having a global platform,” he said.
Carlyle Venture Partners III will target early stage venture capital deals in the US, as well as expansion stage growth capital and growth buyout transactions in sectors including telecom and media, defense and aerospace, automotive and logistics, energy, technology and business services.
The fund close brings the 10-year-old division’s total capital under management to $3.8 billion, which is spread across nine funds investing in Asia, Europe and North America.
Carlyle’s previous US-focussed venture funds have backed companies including radio frequency identification company Matrics, which was acquired by Carlyle in 2001 and sold to Motorola in 2004 for $230 million. Carlyle also invested $10 million in 2002 in Indigo Systems, an infrared sensor and camera company, and exited in 2005, following the company’s 2004, $190 million purchase by Flir Systems.