Anatomy Of A Disaster: Carlyle Capital Corp Drags Sentiment Down

March 2008 | Private Equity Analysis

The news the market was expecting finally came this week: Carlyle Group announced it was unable to save Carlyle Capital Corporation (CCC), its highly leveraged US$22bn mortgage-backed securities fund, from going under. A promise from the firm's co-founder David Rubenstein that Carlyle will "stand by" the failed fund's investors will assure clients who stand to lose US$600mn as well as the Carlyle employees that own 15% of the fund. However, the wider implications were reflected in global equity markets, which tumbled on the back of the news. This is not simply because the fund owned US$31 of debt for every

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