Case of the Carlyle Group: Fund Investor vs. Firm Investor

Is it optimal to invest in a private equity fund, invest in the private equity firm, or both? Sovereign funds and public funds have done it all. Over the years, we have seen deals like the China Investment Corporation’s investment in the Blackstone Group. We have seen CalPERS and Mubadala Development Co. invest in the Carlyle Group and so on. In our estimation, it seems that private equity funds do better than private equity firms when it comes to financial returns.

From CalPERS: Select Private Equity Fund Performance (Firms that have gone public)

Fund Name Vintage Year Capital Committed Net IRR
Apollo Investment Fund V, L.P. 2001 250,000,000 38.10%
Apollo Investment Fund VI, L.P. 2006 650,000,000 4.30%
Blackstone Capital Partners IV, L.P. 2003 185,012,814 38.60%
Blackstone Capital Partners V, L.P. 2006 750,000,000 0.50%
Carlyle Europe Partners II, L.P. 2003 69,157,100 21.70%
Carlyle Asia Partners III, L.P. 2008 300,000,000 -10.80%
Carlyle Partners V, L.P. 2007 1,000,000,000 7.20%
Carlyle Strategic Partners I, L.P. 2004 50,000,000 32.50%
KKR Asian Fund, LP 2007 275,000,000 10.60%
TPG Partners VI, L.P. 2008 855,000,000 -2.80%

Source: CalPERS | The chart avoided private equity funds with a vintage year greater than 2009.

Private equity funds have known risks. They can become zombie funds, lock up capital, produce lowered IRRs, basically lose money for investors. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Contact the writer or creator of this article or page.
Questions or comments: support(at)swfinstitute(dot)org
Follow on Twitter at @swfinstitute and @sovereignfunds
Learn, Attend and Network: Institutional Investor Events and Summits
Go Back: HOME: Sovereign Wealth Fund Institute

institutional investor investment mandates