The Carlyle Group is opening its doors to the somewhat less-wealthy.
The private equity giant is launching a new buyout fund that will have just a $50,000 minimum investment requirement, just 1% of its previous lowest minimum, $5 million (some Carlyle funds have a $20 million minimum investment requirement). The new fund isn't exactly targeted at the middle-class: Investors still must be accredited, with at least $1 million in liquid assets.
Carlyle believes that the new fund could tap into a market with more than $10 trillion, The Wall Street Journal reports.
The new fund is actually a joint-venture with Central Park Group, which will actually handle dealings with individual investors. The CPG Carlyle Private Equity Fund will be structured as a fund of funds, investing in a variety of Carlyle's vehicles. The fund will also seek to buy stakes in Carlyle funds on the secondary market, potentially limiting losses.
Investors will not be saddled with Carlyle's typically long lockups, instead being subject to just a two-year lockup with limited quarterly liquidity.
The fund will pay Carlyle's 1.5% management and 20% performance fees, while clients will pay another roughly 1.8% to Central Park Group and brokers, including wealth advisers at Bank of America and Merrill Lynch.