Carlyle raises $18.5 Billion, its biggest fund in hot market

Carlyle Group LP closed its biggest fund yet, raising $18.5 billion as money pours into the private equity industry from investors seeking the high returns it has historically delivered.

The fund will invest primarily in the U.S. across five industries, including aerospace, defense and government services, the Washington-based firm said in a statement.

The buyout industry set a fundraising record last year. Firms are now faced with deploying more than a $1 trillion at a time when competition is increasing and prices on deals are reaching new highs, according to data provider Preqin.

The hot fundraising pace is continuing, with Blackstone Group LP expected to seek more than $20 billion as it begins marketing its eighth fund later this year, Bloomberg reported in early July.

Last year, KKR & Co., Silver Lake Management LLC and Advent International all completed multibillion-dollar capital raises. Apollo Global Management LLC brought in a record $24.7 billion for the largest fund ever raised by a buyout firm.

Carlyle’s previous U.S. buyout fund -- the $13 billion Carlyle Partners VI -- began investing in 2014. Investments in that fund include Signode Industrial Group, formerly part of Illinois Tool Works, and Ortho-Clinical Diagnostics, formerly part of Johnson & Johnson.

David Rubenstein founded Carlyle in 1987 with Bill Conway and Dan D’Aniello. One of the firm’s most successful investments was a buyout of DuPont Co.’s auto-paint business in 2013. Carlyle made $4.5 billion, its second-biggest profit ever on the deal, and an annualized return of 80 percent.

Rubenstein and Conway said in October that they were ceding their roles as co-CEOs to Glenn Youngkin and Kewsong Lee at the start of this year, passing on control of the $201 billion firm to the next generation.