Carlyle targets $15B fund as PE gold rush continues

July 25, 2017
After watching rivals like Apollo Global Management and KKR raise enormous buyout funds during the first half of the year, The Carlyle Group wants in on the fun. The firm is targeting $15 billion for its next US fund, according to Bloomberg, the latest 11-figure vehicle in what’s shaping up to be the most lucrative year ever for such mega-funds.

Here's an annual breakdown of buyout funds that have reached at least $10 billion since 2007:
 
   
Already, investors have closed five buyout funds on at least $10 billion this year, raising a total of $67.9 billion. If Apollo holds a final close for its ongoing $23.5 billion fund and Carlyle gathers $15 billion before the end of the year, those totals would grow to seven vehicles and $106.4 billion. Each would exceed the current highs set in 2007.
 
The rate of massive buyout funds being raised is representative of the fundraising climate as a whole. Private equity firms are finding it easier to raise capital than ever before, hitting their targets at an historic clip and closing vehicles with record speed. Those trends are just some of the reasons 2017 is challenging 2007 as the gold standard for PE fundraising.
 
The Carlyle Group, meanwhile, is in the midst of a characteristically busy year. The firm has completed 36 investments thus far in 2017, per the PitchBook Platform, ranking in the top five of all PE firms. In terms of fundraising, a $15 billion buyout pool would be Carlyle’s largest ever, topping the firm’s $13.7 billion Carlyle Partners V. It would also mark significant progress in the firm’s previously announced goal to raise $100 billion in new capital by the end of 2019 across its various strategies.

Carlyle’s fundraising history

Here’s a quick look at the vintages, sizes and IRRs of the firm’s latest flagship US buyout funds (Fund VI data as of 4Q 2016, all others as of 1Q 2017):
 

While some of those IRR multiples may not be jaw-dropping, they require some context. The 14% number for the firm’s fifth fund, for instance, actually ranks at the top of its 2007 peer benchmark, per PitchBook data. The performance of many of the fund’s competitors was stunted by the financial crisis that began shortly after their closings. Going back further to a fund that’s traveled a complete lifecycle, Carlyle Partners III ranks in the top half of its benchmark.
 

PitchBook subscribers can learn more about Carlyle’s fundraising history, recent deals and more.

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