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Carlyle Having Second Thoughts On This Whole Hedge Fund Thing

It's mulling over the idea of shutting down it's $4bn credit fund.
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Not what he had in mind.

Specifically, the Claren Road hedge fund thing, which Carlyle bought back in 2010 when it was trying to become a diversified asset-management giant. You know, on account of its losing a whole bunch of money over the last 18 months and the fact that no one wants to invest in it anymore. Little things like that.

Investors submitted redemption requests totalling $1.97bn, or 48 per cent of the fund's assets of $4.1bn at the end of July, according to a filing with the Securities and Exchange Commission.

Last September the fund was managing $8.5bn, its peak level…

The four members of Citigroup's credit trading department who founded Claren Road in 2005 are Brian Riano, John Eckerson, Sean Fahey and Albert Marino. The group is planning to take soundings from exiting and continuing investors to examine options for the future of the fund, including shutting its doors, according to people familiar with the situation.

Carlyle is also examining its options, like the option to not pay those four bastards.

Carlyle, which bought a 55 per cent stake in the fund for an undisclosed sum in 2010, said on Monday that it would write off up to $175m of the remaining value of Claren Road, which was on its books at $216m at the end of June. It may not now have to pay up to $41m in earn-outs and other fees under the terms of the 2010 deal.

Carlyle considers shutting $4bn credit hedge fund [CNBC via FT]


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