Carlyle Group is reportedly winding down its $4bn energy credit business following the exit of two of its co-heads.
Managing directors David Albert and Rahul Culas have recently left the firm, triggering a ‘key man event’, people with knowledge of the matter told Bloomberg.
The remain energy credit team will discontinue investing from its capital pool and manage out the remaining portfolio, Bloomberg’s report added.
The unit closed Carlyle Energy Mezzanine Opportunities Fund II on $2.8bn in 2016, six years after pulling in $1.4bn for the final close of its debut vehicle.
The first energy mezzanine fund recorded a negative rate of return, according to the firm’s first quarter financial results for 2019. Fund II is 39 per cent invested and posted a 1.1 multiple as of March 31.
The business unit targeted opportunities across the power generation and energy sectors, typically investing between $50m and $500m per deal according to Carlyle’s website. The firm’s investments included the partnership between Hilcorp Energy Co and Shenandoah Petroleum Corp, Hilcorp Energy Development.
Before joining Carlyle, Albert and Culas worked on project and structured finance at Morgan Stanley.
Carlyle’s Global Credit platform manages $46bn of assets across its funds in liquid credit, illiquid credit and real assets credit operations.
The private equity major recently amassed $4.6bn of capital commitments for the final close of two specialist funds targeting infra and credit deals.
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