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Washington merchant bank Carlyle Group's new unit, Carlyle Asset Management Group, is aiming to expand into other areas of alternative asset management while the leveraged buyout and venture capital sectors are slumping. Carlyle is said to be planning a fund of hedge funds as well as a fund that backs start-up hedge-fund managers.
Afsaneh Mashayekhi Beschloss, chief executive and chief investment officer of the new Carlyle unit, and a former treasurer and chief investment officer of the World Bank, wouldn't reveal details of specific funds, but said the firm decided to expand its range of investment products in response to demand from existing clients: "A number of investors are interested in other areas, and they would like to see products that use Carlyle's high standards."
Hedge funds are an entirely new area for Carlyle, but Mashayekhi Beschloss said the firm's existing research capabilities give it a head start in the business. Carlyle's 250 investment professionals can help identify the top hedge-fund managers in their respective sectors. And these managers may be more willing to accept money from Carlyle because they value access to its research staff. "There's a two-front information flow," she said.
Although venture capital firms received took in only $40.6 billion last year, compared with a record $104.6 billion in 2000, many private-equity experts think the secondary, or resale, private equity market could be poised to take off. But it's difficult for Carlyle to offer new kinds of private equity product because the firm will be running its own private equity portfolios while it is also investing with other firms that it competes with for buyout deals.
Mashayekhi Beschloss said: "There is a fire wall. Information will only flow one way, from The Carlyle Group into Carlyle Asset Management; any information Carlyle Asset management gets won't (go the other way)." She noted that Carlyle's asset management unit has separate offices in Washington and will soon have its own offices in London, as well as its own chief financial officer.
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