The Carlyle Group has been collecting information for a debt investor database that will be operational in January. In an effort to keep a closer watch on who is investing in its deals, Carlyle is asking for names, phone numbers and company information.
"We have put together a Web site where investors can keep information up-to-date with us so it's easier to keep track of who we are inviting to our deals and make sure...we know who they are and we are supporting that relationship," said Michael Zupon, managing director and head of leveraged finance at Carlyle.
Zupon joked that a few years ago his Rolodex had 20 to 30 names in it and now the market has grown to more than 200 institutions looking to invest in loans. "The purpose is to put us in a position to really have all the facts on who the firms are that have been consistent and long term lenders that we know are reliable so we can make sure they are well treated and well allocated," he said.
He explained it is important to have all the correct information because bank agreements continually need amendments and therefore investors need to be contacted. It is something Carlyle has paid attention to for a long time, but with the investor base growing, it became imperative to put something together now.
While a firm declining to register will not be banned from Carlyle deals, it will be a factor, Zupon said. He anticipates the firm will reach out to investors to put them in the database, while underwriters will also direct investors to Carlyle.
One investor who did not know about the registry said this could be the next evolution as private equity investors look to better know and monitor who is investing in their deals. Calls to press officials at other private equity firms were not returned to discuss whether other groups would be looking to do something similar, though some in the market said they had not heard of any plans.
Another portfolio manager said he wasn't surprised Carlyle has taken this step. "It seems like the kind of thing they would do," he said. "I know they are a little more active in terms of managing lender relationships than other private equity firms are." A third market player said he thought it was a great idea. "They have been fixated on who their investors are longer than anyone else has."
