Friday, July 1, 2011

Carlyle's Pieces in Place for Next Credit Tsunami

Bloomberg reported:

Wells Fargo & Co. has raised a $507 million loan fund to be managed by Carlyle Group, the first collateralized loan obligation the private equity firm has raised since 2008.

Before the September 2008 financial meltdown, The Carlyle Group held a collateralized mortgage fund, Carlyle Capital Corporation, and a hedge fund, Carlyle Blue Wave.  Both funds drowned well before the financial crisis wave pounding.  Carlyle Capital folded in March 2008. 

Carlyle Capital's counterparties for its repurchasing agreements at the end of 2007 were Bank of America, Bear Stearns, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank, ING, JP Morgan, Lehman Brothers, Merrill Lynch and UBS, according to its latest -- and only -- annual report.

Carlyle Capital may have contributed to the fall of Bear and Lehman.  Carlyle Blue Wave Hedge Fund imploded in July 2008.

The Carlyle Group is back in the hedge fund arena with Claren Road.  It's in the private equity fund of funds business with its AlpInvest deal.  When that closes, Carlyle will manage over $150 billion in assets.  It had $91.1 billion when Lehman fell.  How will $60 billion more ride in rough financial seas?  Stay tuned, but you may need to discern what's coming.

Update 7-3-11:  WaPo reported "Wall Street is buzzing about Carlyle’s pending public offering, a move that stands to make the mammoth District private equity firm even bigger."  I recall markets abuzz over Carlyle's IPO of Carlyle Capital Corporation.