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Carlyle to join $15bn megafund club

Carlyle is expected to set a target of approximately $15bn for its next US buyout fund once its predecessor is 70 percent invested, likely to occur once recent deals totalling $41bn complete.

The Carlyle Group, a US private equity firm, is expected to launch a $15 billion (€12 billion) fundraising for its next US buyout fund once a series of large deals including Freescale and Open Solution complete, according to a source.
 
At the same time, Carlyle is raising funds for a €3 billion-targeted European buyout fund, although that could be extended to up to €4 billion, said the source, who was unable to confirm a target date for a first closing.
 
No target has yet been set for Carlyle Partners V, the successor to 2005’s $7.8 billion US buyout fund, but it is likely to match the fundraising attempts of other US large buyout firms such as The Blackstone Group, Kohlberg Kravis Roberts and Texas Pacific Group, all of which have drawn commitments of more than $15 billion.
 
Carlyle Partners IV was approximately 60 percent invested prior to a slew of recent large deals, including August’s $22 billion take-private of energy logistics company Kinder Morgan as part of a consortium including Goldman Sachs Capital Partners, AIG and Riverstone Holdings; the $17.6 billion acquisition of Freescale Semiconductor with Blackstone, Permira and Texas Pacific last month; and this week’s purchase of software business Open Solutions for $1.3 billion alongside Providence Equity Partners.
 
Marketing for Carlyle Partners V will not begin until fund IV is at least 70 percent invested.
 
Carlyle’s previous European buyout fund, Carlyle Europe Partners II, is approximately 70 percent invested and has returned 2.1 times its money with a net internal rate of return of 46.3 percent, according to figures from the California Public Employees’ Retirement System, which has committed $56 million to the fund.
 
Other funds currently being raised by Carlyle include a $250 million Mexican buyout fund and a third US-focused venture capital fund, which has a target of $750 million and will make both venture capital and growth capital investments.