Carlyle expands with AlpInvest buy-out

City A.M. Reporter
Private equity giant Carlyle is to buy Dutch-based private equity fund-of-funds AlpInvest Partners to bulk up its product offering.

The deal could catapult Carlyle Group to rank as the world's largest private equity firm by assets under management and would provide a springboard for AlpInvest to expand internationally.

No financial details were disclosed.

"We can say to our own investors we have an array of products, not just our own funds, but we have AlpInvest funds," David Rubenstein, Carlyle's co-founder and managing director, told Reuters on Wednesday on the sidelines of a news conference in Amsterdam.

"A number of investors around the world have said sometimes they don't want to invest in our funds directly, they would like to go in a fund of funds and asked who do we recommend ... and now we have somebody to recommend."

As a fund of funds, AlpInvest invests in other private equity funds rather than directly in companies and assets.

Rubenstein said AlpInvest will no longer be allowed to invest in Carlyle funds to avoid conflicts of interest, or any suggestion that it had been pressured into investing in Carlyle. But AlpInvest's existing investments with Carlyle will not be sold.

"The investments will just play out, they will not be sold," Rubenstein said.

Carlyle will take a 60 per cent stake in the venture, with AlpInvest management taking the other 40 per cent.

AlpInvest has more than €40bn in private equity funds and new commitments, including money for two major Dutch pension fund managers.

The two Dutch pension managers APG and PGGM who are selling their stakes will continue to commit funds to AlpInvest.

APG is the asset manager for ABP, the world's third-largest sovereign pension fund. PGGM is the asset manager for PFZW, the pension fund for the Dutch care and welfare sector.