Carlyle Group Claren Road

Carlyle Group Claren Road

Carlyle Group Buys 55% Stake in Claren Road Hedge Fund

One of the largest private equity firms in the world has bought a 55% stake in a hedge fund firm. This is not the first time that a private equity firm has waded into the hedge fund industry like this, for example Blackstone Group bought part of a Brazilian hedge fund in 2008. Carlyle Group has bought a stake worth more than half of Claren Road Asset Management, which manages $4.5 billion in AUM.
The Claren Road acquisition illustrates the trend for private equity firms to diversify beyond their traditional field of leveraged buyouts. Diversifying into shorter-term investment strategies than leveraged buyouts can smooth out demands for liquidity by investors in private equity funds.

Blackstone Group LP (BX) bought a stake in Brazilian hedge fund manager Patria for a reported $200 million in October and GSO Capital Partners LP in March 2008. KKR & Co. LP (KKR), meanwhile, has hired a group of former Goldman Sachs Group Inc. proprietary traders to launch a credit hedge fund early next year.

Terms of the Claren Road transaction, which is expected to close by year's end, weren't disclosed.

The purchase is the second acquisition Carlyle managing director Mitch Petrick has made since being charged with building the firm's credit platform in March. Source

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