Carlyle's diversity

11 March 2008 By Lauren Silva

The firm s Carlyle Capital affiliate is on the brink after making a relatively simple, if highly leveraged, bet on agency securities. That seems almost naive compared to the diverse and sophisticated investing Carlyle is known for. And it may not be what investors expected.

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Carlyle's founders are considering pumping money into Carlyle Capital, according to the Washington Post. Carlyle Group's three cofounders William E. Conway Jr., David Rubenstein and Daniel D'Aniello, would make the investment.

In Carlyle's first quarterly report, the company said Going forward, we expect to allocate a greater proportion of our capital to US and European bank loans, high yield debt securities, CDOs and CLOs and to mezzanine debt as we reach our expected allocation set forth below. Additionally, we may in the future allocate capital to asset classes not represented above in a manner consistent with our investment guidelines.

We believe our investment strategy is conservative and is designed to pay a consistent high cash dividend yield to investors. Although our investment strategy enables CCC to invest in various asset classes, we principally invest in AAA US Government Agency capped floating rate securities that enjoy the implied guaranty of the US government.

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