Carlyle Plans Hedge Fund, Debt Push

Sep 20 2010 | 9:44am ET

Private equity giant the Carlyle Group is eyeing a return to the hedge fund business two years after liquidating its only such vehicle.

The Washington, D.C.-based firm is looking to buy a stake in a hedge fund manager and is in talks with several possible firms, Bloomberg News reports. Among the hedge funds negotiating with Carlyle is one with as much as $5 billion in assets under management.

Carlyle is also planning a pair of new debt funds and aims to raise another $1 billion to buy small-cap companies. The firm hopes to raise $1.5 billion for its new distressed debt fund, and Carlyle is also marketing a mezzanine fund focusing on power companies.

Those two funds and Carlyle’s new hedge fund endeavor are headed by Mitch Petrick, who joined the firm in March from Morgan Stanley, where he was head of sales and trading. Petrick has named two of his former colleagues from Morgan Stanley, David Albert and Rahul Culas, to manage the mezzanine fund.

Carlyle shuttered its Blue Wave Partners hedge fund in August 2008, just 16 months after its debut. The firm blamed its failure to raise enough money; it managed just $600 million at the time, far less than the $1 billion Carlyle sought.

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