Carlyle Group LP (CG:US), the world’s second-biggest private-equity firm by assets, is lowering the minimum a person can invest in a new buyout-focused fund as it seeks to expand its number of so-called limited partners.
The fund, which Washington-based Carlyle is starting with investment firm Central Park Group LLC, will accept commitments of as low as $50,000 from accredited investors, according to a regulatory filing (CG:US) with the U.S. Securities and Exchange Commission. The SEC defines an accredited investor as having a net worth of more than $1 million; earning more than $200,000 in each of the past two years, or $300,000 including a spouse; or being involved in the management of the fund.
Carlyle co-founder David Rubenstein has said that the growth of commitments by individual investors to so-called alternative-asset funds will outpace that of public institutions such as pension plans. Competitor KKR & Co. (KKR:US) last year started two funds -- a mutual fund that plans to buy non-investment- grade debt and a closed-end debt fund -- that lowered the cash standard for individual investors to $2,500 commitments.
“The individual investor velocity will be much greater” than that of public pension funds, Rubenstein said last month on a conference call with investors and analysts. “I do believe in time, the individual investors will be able to come into private equity in different ways than they are today.”
Central Park Group was founded in 2006 by two executives from UBS AG, where they started the investment bank’s alternate- investment business for private clients. It specializes in investing clients’ money in private-equity and hedge funds, real estate pools and funds-of-funds.
The firm will allocate money from the new pool, called CPG Carlyle Private Equity Fund, to a variety of Carlyle-managed funds, according to the filing.
Carlyle, founded in 1987 by Rubenstein, William Conway and Daniel D’Aniello, oversees $170 billion across 113 funds and 67 funds-of-funds. The minimum commitment to its funds is typically between $5 million and $20 million, according to the filing.
The Wall Street Journal earlier reported the move by Carlyle to lower the minimum investment value.
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