The Carlyle Group LP (Nasdaq: CG) closed a new U.S. collateralized loan obligation (CLO) fund valued at about $403 million. The fund, Carlyle GMS CLO 2016-1, will invest mostly in senior secured bank loans. In 2015, Carlyle raised a CLO fund to target bank loans.
Carlyle issued $15.8 billion in CLOs since 2011 and as of Dec. 31, the PE firm’s CLO business has about $19 billion under management. Carlyle’s CLO's are part of its global market strategies division, which includes energy mezzanine loans along with high yield and distressed debt. The PE firm also raised a CLO fund in 2014.
Carlyle’s fundraising comes when the CLO market faces challenges because of risk retention regulations. CLO issuance is down about 50 percent from a year ago. For more, read Tightening Credit Leads PE Firms to Alternative Lenders. Also, see Middle Market CLOs Face Same Headwinds as Other Lenders.