Carlyle's AlpInvest raises $4.1 billion for ninth co-investment fund

AlpInvest Partners, a unit of Carlyle, has successfully raised $4.1 billion for its ninth co-investment fund (ACF IX), exceeding its $3.5 billion predecessor from 2021, signaling continued investor interest in private equity buyouts. The fund attracted 185 global investors, including pension funds, asset managers, and family offices, seeking access to co-investment opportunities alongside buyout firms, particularly in middle-market transactions priced at a 15-20% discount compared to peak buyout years.

Analysis

AlpInvest Partners, a unit of The Carlyle Group (CG), has successfully closed its ninth co-investment fund, ACF IX, at $4.1 billion, notably exceeding the $3.5 billion raised for its predecessor fund in 2021. This achievement, supported by 185 global investors including pension funds, asset managers, and family offices, signals robust and continued investor appetite for private equity co-investment strategies. The fund's strategy will target whole-company buyouts and stake purchases globally, with a particular emphasis on middle-market transactions, which AlpInvest executives indicate are currently available at a significant 15% to 20% valuation discount compared to the peak buyout years at the beginning of the decade. This successful capital raise, which benefited from an extended fundraising period attracting new investors, not only underscores AlpInvest's strong track record of committing over $19 billion across more than 400 co-investments but also reflects positively on Carlyle's capacity to attract capital to its diverse private market offerings, consistent with the strongly positive sentiment (0.7) noted for CG.

Key Decisions for Investors

• Investors should recognize the sustained appetite for private equity co-investments, as evidenced by AlpInvest's successful $4.1 billion fundraise, suggesting continued capital deployment opportunities in this segment.
• For existing or prospective investors in The Carlyle Group (CG), this significant capital influx into its AlpInvest unit is a positive indicator for potential assets under management growth and associated fee-related earnings.
• The strategic focus on middle-market buyouts at reported 15-20% valuation discounts compared to recent peak years presents a potentially attractive entry point that investors allocating to private equity may wish to consider.
• The ability to attract 185 global investors, including new LPs, to ACF IX suggests a flight to quality and experience; therefore, investors might prioritize established platforms like AlpInvest for accessing private equity co-investment opportunities in the current market.