Carlyle Gets $150 Million From Indiana for Custom Fund

Carlyle Group LP (CG), the world’s second-biggest private-equity firm, was awarded a mandate to manage $150 million in a custom fund on behalf of the Indiana Public Retirement System.

Carlyle and fund-of-funds investor AlpInvest Partners BV have opened an office in Indianapolis and will manage and invest Indiana Investment Fund II, Washington-based Carlyle said in a statement today. The fund will invest directly in deals, alongside other buyers, in private-equity funds, in real estate and credit, and in other opportunities directly or indirectly related to Indiana, according to the statement.

Big private-equity investors such as public pension funds have turned to separately managed accounts to negotiate cheaper fees and retain some control in investment decisions, in exchange for locking up their money for a decade or more. Carlyle in 2011 struck a deal with the Municipal Employees’ Retirement System of Michigan to manage as much as $250 million in a separate account.

“By investing capital here in Indiana, INPRS achieves the dual goal of targeting premium rates of returns while nurturing Hoosier entrepreneurs and their businesses,” Steve Russo, the Indiana pension’s executive director, said in the statement. A Hoosier is an Indiana resident.

Indiana’s pension system oversees $27.2 billion, serving 447,000 members and retirees, according to the statement.

Carlyle last week re-branded its funds-of-funds unit with the hire of Morgan Stanley (MS)’s Jacques Chappuis, who will run the solutions business when he joins the firm’s New York office in May. Carlyle will task Chappuis with creating new offerings for investors, including customized accounts, fund-of-funds investments, portfolio advice and risk management.

To contact the reporter on this story: 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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