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 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.
A Carlyle spokesman declined to comment beyond the filing.
Developing mutual funds has historically been challenging for
private equity firms because the average buyout fund is illiquid,
with a typical life span of 10 years. But as these firms diversified
into relatively more liquid alternative assets such as credit and
hedge funds, they have sought to widen their investor base beyond
institutional investors.
"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.
Rival Blackstone Group LP launched its first alternative
investment-focused mutual fund last summer. Dubbed Blackstone
Alternative Multi-Manager Fund, it offers exposure to the
bread-and-butter of hedge fund investing such as troubled debt,
commodities speculation and shorting stocks.
KKR & Co LP launched its first publicly listed mutual fund, KKR
Alternative High Yield in 2012, investing in risky debt such as junk
bonds. Last July, it launched its first listed closed-end fund, KKR
Income Opportunities Fund, which is also investing in debt.
Both Carlyle's mutual funds will be open-end funds. The number of
shares in an open-end fund can be indefinite and shares are sold by
the fund company. In closed-end funds, there is a finite number of
shares.
Alternative asset managers have developed other ways to raise money
from non-institutional investors. These include business development
companies (BDCs), which pay at least 90 percent of annual earnings
as dividends to avoid corporate taxation under provisions passed by
Congress in 1980.
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They are also turning increasingly to so-called feeder funds,
special purpose vehicles that gather money from individual high
net-worth investors or family offices before investing in
alternative assets such as private equity funds.
Carlyle launched its first BDC called Carlyle GMS Finance Inc last
year to lend to midsize U.S. companies. Using investment firm
Central Park Group LLC, Carlyle has also launched a captive feeder
fund to allow individuals with net worth in excess of $1 million to
commit as little as $50,000 to its private equity fund portfolio.
Carlyle Enhanced Commodity Real Return Fund will use Vermillion
Asset Management LLC, the commodities-trading hedge fund manager
that Carlyle took over in 2012, as advisor, according to the filing.
Washington, D.C.-based Carlyle, founded in 1987 by Conway, David
Rubenstein and Daniel D'Aniello, had $185 billion in assets under
management as of the end of September.
InvestmentNews, a newspaper for financial advisers published by
Crain Communications Inc, first reported on the regulatory filing on
Carlyle's mutual funds earlier on Friday on its website.
(Reporting by Greg Roumeliotis in New
York; Additional reporting by Linda Stern; editing by David
Gregorio)
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