Tuesday, April 6, 2010

Carlyle's Financial Fund Closes at $1.1 Billion

Dealbook reported:

The Carlyle Group said on Tuesday that it has raised $1.1 billion for its first fund dedicated to acquiring financial services firms. So far, the fund, Carlyle Global Financial Services Partners, has poured about 30 percent of its capital into three investments: Bank of N.T. Butterfield and Son, BankUnited Financial and Boston Private Financial Holdings.

Butterfield is a Bermuda bank with a Cayman Islands/Barbados presence. BankUnited got $4.9 billion in FDIC subsidies. Boston Private, serving the high net worth marketplace, received $153 million in TARP funds and is yet to pay $103 million back.

Carlyle formed its financial services group in June 2007 under Olivier Sarkozy, a veteran financial institutions banker, and the team now includes Randal K. Quarles, a former Treasury Department under secretary for domestic finance.

Randall Quarles' bio states he oversaw reform of Fannie Mae and Freddie Mac, as well as derivatives as Bush's Undersecretary of Treasury. That worked out rather badly.

Carlye co-founder commented in a press release about his crack team:

"...demonstrated to investors along the way that we had assembled a talented group at the right time to capitalize on a range of opportunities in the financial services space."

The White House loves private equity underwriters (PEU’s). Don't worry, Randall Quarles old spot will be occupied by another PEU, as President Obama nominated Jeffrey Goldstein.

Carlyle and their PEU brethren are in a sweet spot. Financial reform gives private equity a free pass. It seems their prayers have been answered. Now they need their marketing lines to work.