Carlyle to step into lending with $1bn mid-market loan fund


Global private equity giant Carlyle Group is attempting to raise $1bn for a specialised loan fund aimed at mid-market US companies, it is understood.

The fund, named Carlyle GMS Finance according to Bloomberg, will focus on senior secured and unitranche loans – a combination of senior and mezzanine debt.

It added Carlyle would also use the fund to invest in other types of company debt and equity.

The fund is believed to be seeking returns of between seven per cent and ten per cent.

Earlier this week Palio Capital Partners confirmed plans to dual list its Palio UK Mid-Market Debt Fund on the Specialist Fund Market of the London Stock Exchange and on the Channel Islands Stock Exchange, targeting a fundraise “in excess of £150m”.

Demand for debt financing in the UK lower mid-market is estimated at £25bn between 2013 to 2017.

Both moves stem from regular banks stepping away from mid-market lending following the global financial crisis, with new regulations forcing them to maintain more capital and reduce their risks.

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