Carlyle Buys Commodities Hedge Fund Vermillion

Oct 3 2012 | 1:40pm ET

The Carlyle Group added commodities trading to its lineup with a deal for hedge fund Vermillion Asset Management.

Washington, D.C.-based Carlyle paid an undisclosed amount of cash and stock for 55% of New York-based Vermillion, which has about $2.2 billion in commodity fund assets under management. The firm, led by co-founders Drew Gilbert and Chris Nygaard, trades agricultural energy, metals and soft commodities.

Both Gilbert and Nygaard will remain with the hedge fund and will continue to lead its day-to-day operations. Vermillion will serve as Carlyle's exclusive commodities platform.

Under the deal, Carlyle will make performance-based contingent payments over the next five-plus years. At most, it will pay Vermillion's principals less than 0.5% of Carlyle shares outstanding, worth, at today's prices, about $37 million; the cash will be reinvested in Vermillion's funds.

"For many years, Carlyle has successfully invested in a variety of energy, agriculture and infrastructure companies," Carlyle's Mitch Petrick said. "Vermillion employs a liquid, relative-value, low-volatility approach to trading both physical commodities and their derivatives to produce positive, uncorrelated returns."

Drew and Nygaard set up Vermillion in 2005.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note