Carlyle AlpInvest has closed a $1.25bn securitisation of private equity fund stakes through a collateralised fund obligation (CFO), marking its third such transaction as institutional appetite for structured exposure to private markets continues to build, according to a report by Bloomberg.
The latest deal, which settled Thursday, aggregates interests in four Carlyle-managed funds alongside a diversified pool of smaller secondary stakes in buyout vehicles managed by other private equity firms. The transaction offers exposure across vintage years and manager strategies, creating a broadly diversified collateral pool.
As with previous CFOs, the structure slices fund exposure into tranches of debt and equity, allowing investors to tailor their risk and return profiles. Carlyle offloaded nearly all of the equity tranche – the most junior portion of the capital stack – to third-party investors, including insurance companies and family offices, according to Mike Hacker, Global Head of Portfolio Finance at the unit.
The transaction reflects growing institutional interest in CFOs as a yield-enhancing, investment-grade exposure to private markets, particularly among insurance buyers seeking to match liabilities with alternative fixed income-like instruments.
This deal follows Carlyle AlpInvest’s $1bn CFO issued in October 2024, underscoring the firm’s continued use of securitised structures to optimise balance sheet capital and enhance liquidity across its fund portfolios.
The transaction was led by Evercore as sole structuring agent and placement agent, with TCG Securities and Wells Fargo also participating.
