Hedge Funds

Carlyle Group Lends $100 Million More to Troubled Fund: WSJ


Carlyle Group will lend another $100 million to troubled Carlyle Capital, a highly-leveraged fund in which its partners have a minority stake, the Wall Street Journal reported Tuesday.

Caught in the turmoil caused by the U.S. subprime crisis, Carlyle Capital was forced to cancel its dividend and sell assets to meet cash needs less than two months after listing on Euronext Amsterdam.

The fund said in a statement that it had already spent $100 million from a loan granted by Carlyle Group last week and that it would draw another $100 million in installments. Many Carlyle partners, including its three founders, collectively own a minority stake in the mortgage fund.

The fund said it has sold about $900 million in assets, including loans from U.S. and European banks, mezzanine debt securities -- debt which can be turned into shares in the borrower -- and interests in four collateralized loan obligations run by units of Carlyle Group. The estimated loss from the asset sales is about $40 million.

Shares of Carlyle Capital fell 6.6% in Amsterdam trading.