Carlyle Said to Seek 3 Billion Euros for Next Europe Fund

Carlyle Group LP (CG), the second-biggest private-equity firm by assets, will seek 3 billion euros ($3.9 billion) for its next European buyout fund after raising 5.4 billion euros for its predecessor, according to two people with knowledge of the matter.

The firm plans to start marketing Carlyle Europe Partners IV LP this month, said the people, who asked not to be identified because the information isn’t public.

Carlyle, which raised its third European buyout fund in 2006, is among a number of private-equity managers gathering smaller pools of capital in a crowded market. Sweden’s Nordic Capital told clients it will seek 25 percent less than the 4 billion euros it initially targeted for its latest buyout fund, two people with knowledge of the talks said in October. London- based Permira Advisers LLP has yet to hold an initial close for its 6.5 billion euro fund after more than a year of capital raising, according to investors.

Randall Whitestone, a spokesman for Washington-based Carlyle, declined to comment on the firm’s fundraising plans.

Carlyle’s European buyout arm typically invests in Europe- based companies with enterprise values of more than 200 million euros, according to the firm’s website. The unit, founded by Jean-Pierre Millet, raised 1 billion euros for its first fund in 1998. The firm increased the size of its 2006 offering from the 1.8 billion euros gathered by the second fund in 2003.

Predecessor’s Returns

Carlyle Europe Partners III LP was producing a multiple of 1.2 times invested capital and a 4 percent internal rate of return as of Sept. 30, according to the firm’s latest earnings report. Fund II had a 1.8 multiple and a 21 percent return rate.

The firm in October handed back cash to investors through a dividend recapitalization of NBTY Inc., the maker of Nature’s Bounty and Rexall vitamins. Both the Europe fund and Carlyle Partners V, a $13.7 billion U.S. buyout fund, had invested in the company in 2010 and returned to clients almost half of the equity invested.

In another deal involving those two funds, Carlyle agreed in August to purchase DuPont Co.’s auto-paint unit for $4.9 billion.

Carlyle had $157 billion in assets as of Sept. 30, trailing only New York-based Blackstone Group LP, which oversaw $205 billion, among alternative-asset managers.

To contact the reporters on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net; Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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