Buying AlpInvest, which manages the private equity investments for Dutch asset managers APG and PGGM Investments, would help Carlyle diversify its businesses as it prepares to follow rivals Blackstone Group and Kohlberg Kravis Roberts to a public listing.
Carlyle, one of the world’s largest buyout firms with $97.7bn under management and investments in companies such as Dunkin’ Brands, has been considering an initial public offering for years and is expected that to file papers to go public late next year.
“On a broad level you can understand the motivation,” said Josh Lerner, a Harvard Business School professor specialising in private equity. “Private equity has many virtues but one of the downsides is that it tends to be a pretty cyclical business -- it has a boom-bust flavor.”
It is believed that a deal for AlpInvest could be reached in the first quarter, although talks have not officially been made public yet.
A sale of the firm has been in the works for several months, according to media reports. APG and PGGM each own 50 per cent of AlpInvest.