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Carlyle plans new infra fund launch

The US asset manager, who posted a $47m loss on its real assets portfolio for the last 12 months, says there is a market for a vehicle targeting "full 20% carry".

The Carlyle Group is planning to launch an infrastructure fund next year as it looks to achieve higher returns for its investors, the asset management firm's co-chief executive David Rubinstein said during an earnings call on Wednesday.

“Increasingly when I talk to investors about what we're doing, they say 'do you have an infrastructure fund? Do you have an energy infrastructure fund?,'” Rubinstein said, adding that the firm will most likely market an infrastructure fund sometime next year.

Rubinstein, who referred to the firm's track record in infrastructure – the firm invests in both public and private infrastructure as well as energy and power – did not specify whether the fund would have a generalist or specialist focus. A company spokesperson told Infrastructure Investor that plans for the fund were still in early stages.

As for geographic focus, Rubinstein did not rule out a global remit saying, “you can focus on the US and you can focus on Europe a bit, and that's a pretty attractive market; emerging markets are a little more complicated but I do think the market is pretty large.”

Asked to comment on infrastructure's lower returns and lower fees, Rubinstein replied: “There are different types of infrastructure funds in the market,” adding that some are fee oriented while others have modest carry. “We do think that there is a market for our full 20 percent carry but it depends on the type of assets you're pursuing.”

Carlyle reported economic net income (ENI) for its real assets business – which includes real estate, infrastructure, energy and power – of $26 million for the third quarter and a loss of $47 million for the last 12 months. Meanwhile, the firm posted an overall loss of $128 million for the quarter and $504 million for the last 12 months.

The firm had total assets under management (AUM) for real assets of $40.2 billion as of September 30, down 12 percent over the last 12 months. Across all of its businesses, Carlyle's total AUM was $187.7 million during the third quarter, down from $202.6 million from the same year-ago period.

Additional reporting by Evelyn Lee