Global credit strategy central to Carlyle’s $100bn goal

The firm is aiming to raise $100bn across all of its investment strategies by 2019 and is looking to scale up its European credit and real estate debt business.

Carlyle reiterated its ambition to raise $100 billion by 2019, with its global private debt strategy central to this mission, senior executives said on the firm’s fourth-quarter earnings call.

In 2016, the firm raised $14 billion in capital commitments from investors across all of its asset classes, including private debt. Last year, the firm announced the $100 billion goal to be raised across the four-year period.

“Over the past year we generated $14 billion in gross new commitments despite the fact that our largest funds were not in the market,” said David Rubenstein, Carlyle co-chief executive. “But we are positioned to achieve much more substantial fund raising results over the next three years, given the mix of very large funds we expect to have in the market.”

The firm’s private debt strategies include targeting global investments in distressed credit, mezzanine loans and energy-focused funds, as well as its CLO business and Business Development Company unit.

Central to this plan, said Bill Conway, Carlyle co-chief executive, is scaling up the firm’s global credit business. “We need to build out our global credit business into a world class powerhouse,” he said. He reported that its assets under management currently stand at $30 billion.

Looking forward, the firm is looking to expand its European credit business and real estate debt strategy with other plans in the pipeline. The BDC unit, which the firm recognised as being smaller than others, could potentially grow and increasing interest in the CLO strategy is driving the growth of the strategy, despite “the fact that it does have extensive capital requirements with the new risk retention rules that may or may not be repealed”.

Rubenstein said: “One of our highest strategic priorities is to grow the various components of our direct lending activities. We have recruited some exceptional new people to help grow this business.”

In 2016 the firm reached a new record in deployment – investing $17.9 billion across all of its strategies. $700 million was put to work through the Global Market Strategy Carry Fund and as of the fourth quarter the firm had a total of $50 billion in dry powder – with $6.8 billion available through the global market strategy.