Carlyle Hedge Fund On Verge Of Collapse

Carlyle Hedge Fund On Verge Of Collapse

news.bbc.co.uk

Carlyle Capital Corporation (CCC), a unit of the private equity firm Carlyle Group, has said it will not be able to meet lenders' demands for money.
The US mortgage-backed bond fund will collapse if, as expected, its lenders seize its remaining assets.

CCC's problems are the latest sign of the credit market turmoil that has prompted billions of dollars of losses at some of the world's biggest banks.

Other investment funds may now face similar problems, analysts fear.

(visit the link for the full news article)

Just seen this on the BBC news website. More fuel to the fire it seems.

It appears, in CCCs case, that the measures recently brought in by the worlds central banks, to stabilise martgage backed securities has had the opposite effect.

news.bbc.co.uk
(visit the link for the full news article)

Credit worries, which have stalked markets lately, were fanned by
Carlyle Capital Corp. - a fund affiliated with the Washington, D.C.-based
private-equity firm Carlyle Group. The fund said late Wednesday it
expects its remaining assets to be seized after it missed margin calls from
banks on its portfolio of mortgage-backed bonds.

reply topost by Paul


Link to Source: Dark clouds gather over Wall Street


Seems it isn't just a concern anymore, but a reality.

CCC Expects their assets to be seized. That is some disturbing news, to a certain degree.

However, I see a small light at the end of this tunnel, one of them being that small businesses in the service sector may have ample opportunity to gear their sales forces to sell ancillary services that may outweigh the need for others.

A prime example may be in the Health Care or Hospice field. Instead of having visiting nurses or full-time care, perhaps a company that sells Telemedicine or Independent Living facilities "monitoring", for lack of a better term, might have their shot at selling versus the exorbitant cost of a visiting nurse. If marketed properly, they could certainly prove their mettle simply on cost alone. ($45.00 a month versus $3000 per month visiting care).


AB1

Carlyle Capital is only a small part of Carlyle Group, which is one of the largest private equity investment firms in the world. What I don't understand is why Carlyle Group only came up with $150M to try to bail them out. Does that mean the entire Carlyle Group can't raise more than $150M (scary thought) and are just going to stand back and watch one of their units collapse?

Or are they just waiting for the taxpayers to bail them out as usual?

They have money indeed, and they are backed by the Arabs, that is a fact but they want to get rid of their link to the mess in the markets and they are holding to their money.

Not, they are no collapsing they are just getting rid of the hedge fund before it collapse and they lose some money.

reply to post by marg6043


....building off your post:

Among its far-flung business interests, the well-heeled Saudi Arabian clan - which says it is estranged from Osama - is an investor in a fund established by Carlyle Group, a well-connected Washington merchant bank specializing in buyouts of defense and aerospace companies.

Through this investment and its ties to Saudi royalty, the bin Laden family has become acquainted with some of the biggest names in the Republican Party....

"Bin Laden Family Has Intricate Ties With Washington"

reply to post by anhinga


Thanks for the link, we know who the Carlyle groups hold hands with and at the same time we know the power behind their firm.

Whole bunch of crocks, but this is America the land of the free and corrupted Capitalism.

reply to post by mythatsabigprobe


Im not an expert on tax laws, or financial terms, but there in Aust, if you have 2x Businesses, and one runs at a loss... you can claim the loss as a tax break.

Now isnt Bush snr a Carlyle executive?

With the coming economic crisis, maybe it was beneficial to 'sacrifice' one of the lambs EARLY, to ensure minimum loss is felt when the big bang happens.

thus, a minor offshoot of carlyl will not be saved.

reply to post by Agit8dChop


Yes if I am no mistaken the Arabs didn't wanted to invest more money into that venture so I guess that is why the firm is just getting rid of the troublesome hedge fund.

Nice find Paul. I think Robert Preston may be on to something. Carlyle's counterparties include distressed banks like Citi & Deutsche. It would only make sense for these troubled lenders to force margin calls/defaults...and swap the valueless MBS collateral for US government securities under Bernanke's new TSLFA. A no-brain-er really.

When the Fed starts accepting delinquent parking citations as collateral...let me know...I have a glove-box full of 'em


From Peston's Picks:

In fact, it’s arguable that the banks’ seizure of Carlyle’s $20bn-odd in assets has actually been encouraged by the Fed's mortgages-for-Treasuries offer. Because the Fed’s new lending emergency lending facility allows the banks to swap mortgage-backed debt for Treasury Bills in a way that Carlyle could not do. Full Text

Banks to Seize Carlyle Capital Assets
www.blacklistednews.com...

NEW YORK -- The likely liquidation of Carlyle Capital Corp.'s remaining assets sent the fund's shares plummeting more than 90 percent Thursday and rattled stock markets around the globe. It was also a high-profile setback for private equity fund Carlyle Group.

Carlyle Capital said late Wednesday that it expected creditors to seize all of the fund's remaining assets _ investment-grade mortgage-backed securities _ after unsuccessful negotiations to prevent its liquidation.

Its shares, which went public at $19 a share in July and traded at $12 just last week, tumbled 93.6 percent to 18 cents on the Euronext exchange.

Looks like there on there way out. 18 cents a share thats got to hurt.