Carlyle closes CLO fund on $610m

The structured credit deal raised roughly as much as its previous CLO vehicle, which closed on $612m in April.

The Carlyle Group has closed a collateralised loan obligation fund on $610 million, the firm said on Thursday.

The Washington, DC-based asset manager’s US CLO 2017-2 will invest predominantly in senior secured leveraged loans, according to a statement. Citigroup arranged the deal, which marks the second US CLO fund Carlyle has closed so far this year.  

The firm was not immediately available to comment further.

This close nearly matches the $612 million that Carlyle raised for US CLO 2017-1 in April, according to a statement at the time. That deal also invests in senior secured loans and was arranged by Citigroup.

Both deals come as risk-retention rules are potentially changing the CLO landscape in the US after going into effect in December. Similar rules were rolled out in Europe in 2011. These new regulations require fund managers to hold a 5 percent interest in securitised assets they manage.

“To comply with the US risk-retention rules, we expect that we will contribute approximately $750 million to new CLOs issued over the next five years,” Carlyle’s first quarter report read.

These contributions to the new CLOs over that time period will be funded through direct funding from the firm, senior Carlyle professionals, third-party investors, and limited recourse borrowing, the report stated.

The asset manager’s CLOs and other investments (including derivative instruments, and corporate mezzanine securities and bonds) brought in $159.4 million and $156.1 million in income as of 31 March and 31 December, respectively.

Carlyle’s CLO and structured credit business has a total of $19.1 billion in assets under management, including the latest financing. 

The firm’s global credit businesses had $29 billion in assets as of the first quarter. Its credit strategies include private debt, distressed credit, mezzanine loans and energy-focused funds, as well as its CLO business and business development companies, one of which went public this month. 

Earlier this month, Carlyle said it had tapped Alex Popov, a former HPS Investment Partners managing director, to lead its credit opportunities platform.