Saturday, January 4, 2014

Mysterious SEC Filing Has Carlyle Group Offering Two Mutual Funds

InvestmentNews reported yesterday morning:

The Carlyle Group plans to launch its first two '40 Act liquid alternatives mutual funds, one a long/short commodities fund and the other a balanced risk global allocation fund similar to risk parity, according to a filing with the Securities and Exchange Commission.
Reuters reported the names of the funds hours later:

Carlyle Group LP is preparing to launch its first two publicly listed mutual funds, according to a regulatory filing by the latest alternative asset manager seeking to offer its investment platform to retail investors in this way.

Carlyle Enhanced Commodity Real Return Fund will mainly invest in commodity sectors including energy and metals, while Carlyle Global Core Allocation Fund will invest across equities, debt, real estate, commodities and currencies using primarily exchange-traded funds, according to the filing published this week by the U.S. Securities and Exchange Commission.

Here's why Carlyle is offering small investors a PEU stake.  

"I do think that the retail investors are just a lot bigger pile of money than all the other piles of money we can get from investors," Carlyle co-founder and co-CEO William Conway told a Goldman Sachs financial services conference last month.

It's about The Carlyle Group's co-founders making the most hay for their 47 million shares.

Curious for more information I sought out the regulatory filing.  It was not on the SEC website under Carlyle Group LP or on Carlyle's website:

OK, it wouldn't be unusual for the filing to be under the specific fund name.  I searched each fund on both the SEC and Carlyle's website.  Goose eggs!

It would be interesting to find out how InvestmentNews' Jason Kephart and Reuters reporters Greg Roumeliotis and Linda Stern got access to the SEC filing, when it is not available to the public. Is it business reporting in a PEU world?

There are very few people out there who will talk and write honestly about private equity. I know from personal experience that the financial press is so eager to break news on "deals" that reporters (who are increasingly compensated on the number of "market moving stories" they write) can't afford to be critical of Carlyle, KKR and Blackstone, and risk losing access to people at those firms.
I can remember Bloomberg's private equity reporter going on TV to talk about the HCA dividend and calling it a "liquidity event." The reporters are trained by the PE firms' PR people to use language that they find acceptable. Wouldn't want to say they're "cashing out." I've never seen anything like it before.
As for cashing out, that's the big pile of money so attractive to the DBD's.  The question is where they'll park the profits?

Update 1-7-14:  No sign of the filing yet.

Update 1-10-14:  No sign of the filing on Edgar.  So much for public information.  Also, no word from Jason on how he got the filing or a link to its location.  However, he did another story which could well help generate interest in PEUtual Funds.