Fundraising

Exclusive: Carlyle’s global infra fund in $600m first close

The vehicle is targeting $2.5bn and is expected to hold a final close sometime next year.

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The Carlyle Group held a $600 million first close in early October on its Global Infrastructure Opportunity Fund, a source confirmed to Infrastructure Investor.

Carlyle is aiming to raise $2.5 billion and is expected to hold a final close sometime next year, the source said. The Global Infrastructure Opportunity Fund has received commitments from US and European pensions, insurance companies and sovereign wealth funds.

The Washington DC-based firm is expecting mid-teen returns mainly from US investments, where the fund will deploy up to 70 percent of its equity, with the rest to be spent elsewhere in North America, Europe and Asia. The fund has a five-year investment period and will focus on energy and power smart grid infrastructure, midstream assets, airports and water opportunities, the source said.

Carlyle declined to comment for this story.

Carlyle co-founder David Rubenstein said on the firm’s third quarter earnings call earlier this week that their infrastructure business will “kick in in a much more healthy way in 2018”.

Rubenstein and fellow Carlyle founder Bill Conway announced last week they will step aside from their roles as co-chief executives next year. President and chief operating office Glenn Youngkin and corporate private equity deputy chief investment officer Kewong Lee will take the leadership position starting 1 January.

Youngkin devoted a podcast posted on Carlyle’s website in July to public-private partnership opportunities in the US. He said Carlyle, which manages over $174 billion in assets, sees US infrastructure as a great opportunity for investment.

The Global Infrastructure Opportunity Fund is the first infrastructure fund Carlyle has raised since its $1.1 billion Global Infrastructure Buyout fund in 2006. The firm has raised a number of energy and power vehicles since then, including the $1.5 billion Carlyle Power Partners II fund which closed in April 2016.

The infrastructure business is led by 13-year Carlyle veteran Andrew Marino and Peter Taylor, who joined the firm in 2016 after 15 years at Hastings Funds Management.