Sunday, May 21, 2023

Carlyle's Accolade Wines Going "Capital Light"

Financial Review

Accolade Wines, backed by private equity giant The Carlyle Group, is planning to sell one of its most prestigious brands, House of Arras in Tasmania, while considering other asset sales as it battles high debt levels and tough times in the broader wine market.

Carlyle is now selling to meet debt obligations as it pursues a "capital light model."  Previously it sold to lock in massive gains.  

Carlyle's new CEO Harvey Schwartz said in their recent earnings call:

(Schwatrz) expects market turbulence to open low-price entry points into new investments, eventually...

The challenge will be holding on to highly levered affiliates as the market becomes more turbulent.  Retaining limited partner investors is another challenge for Carlyle's new streetfighter CEO.