Carlyle Invested $7 Billion in Private-Equity Deals in 2010

May 23, 2011, 11:46 AM EDT By Anne-Sylvaine Chassany and Jason Kelly

(Updates with new capital raised in eighth paragraph.)

May 23 (Bloomberg) -- Carlyle Group, the world’s second- largest private-equity firm, invested $7 billion last year, a third more than in 2010, as buyouts surged.

Carlyle committed $3 billion to deals that closed in the first quarter of this year, the Washington-based firm said today in its annual report to clients. The firm invested $5.2 billion in 2009.

Private-equity transactions rose more than fourfold last year to $183 billion, according to data compiled by Bloomberg, after credit markets seized up in mid-2008 and financing for takeovers dried up. Carlyle is adding or expanding non-buyout businesses to diversify profits ahead of a potential initial public offering.

“The past year has been a period of exciting change and growth at Carlyle with new people, new geographies and new businesses,” co-founder David Rubenstein said in a statement.

The firm is considering an IPO, co-founder William Conway said in December. Blackstone Group LP, KKR & Co. and Apollo Global Management LLC, all based in New York, have gone public. Blackstone, the world’s largest private-equity company, has gained 57 percent during the past 12 months.

Carlyle agreed in January to buy AlpInvest Partners NV, a Dutch money manager that oversees about 32 billion euros ($45 billion) in private-equity funds, to expand its asset-management operations.

The firm also boosted its structured credit offerings, established an energy mezzanine team and purchased a majority stake in Claren Road Asset Management LLC, a New York-based hedge fund with $5 billion in assets under management.

New Investor Capital

Carlyle raised $4.2 billion in commitments from investors last year, according to the report. The money was spread across six funds and co-investment deals with limited partners -- the pensions, endowments and sovereign wealth funds that comprise private equity’s main investor base. Many of those funds lost value during 2008 and 2009, preventing them from making new commitments to private equity.

The firm returned a record $6.4 billion in deal profits to clients in the first quarter after distributing $7.5 billion last year.

“We are pleased that Carlyle continues to earn the confidence of its investors even during the most turbulent times,” Carlyle’s founders said in the annual report.

Fundraising has proved difficult for buyout firms even in a recovering economy. Managers raised $42.3 billion in the first quarter, the lowest amount in almost eight years, researcher Preqin Ltd. said last month.

--Editors: Larry Edelman, Christian Baumgaertel

To contact the reporter on this story: Anne-Sylvaine Chassany in Paris at achassany@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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