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Leading private equity Carlyle seeks to use its funding to enhance Europe’s cleantech, cybersecurity, and digital transformation sectors.
The Carlyle Group (NASDAQ: CG) has raised more than $3 billion in funding to invest in a pan-European technology fund. According to the co-heads of Carlyle Europe Technology Partners, Michael Wand, and Vladimir Lasocki, this funding initiative will take advantage of “pockets of life” in the economy.
The Carlyle fund, called CETP V, focuses on lower mid-market and growth technology platforms across Europe. In addition, CETP V has already surpassed its 2.5-billion-euro target after less than a year of fundraising. As it stands, the latest Carlyle Euro tech fund is more than double the size of its predecessor, CETP IV.
Carlyle Funding Outlook
CETP V reportedly has an average investment horizon of five years and seeks to enhance strategic areas such as cleantech, cybersecurity, and digital transformation. Carlyle intends to inject funds into as many as 30 companies through this new fund. In most cases, such investments will be via the purchase of a majority stake. In addition, Wand and Lasocki also state that the multinational private equity fund will endow software applications for financial services, healthcare, and infrastructure. Lastly, CETP V will retain around 15% of the fund for growth equity transactions.
Lasocki further explained that despite several macroeconomic developments, opportunities still abound in less-impacted private markets. These macroeconomic headwinds include the plunge in tech valuations and a general tech selloff in public markets triggered by Covid and the Ukraine war.
The CETP fund will write equity cheques worth up to 250 million euros. This endowment projection will subsequently result in enterprise-value deals ranging between 100 million euros and 500 million euros. Furthermore, Carlyle will target B2B technology businesses across Europe and support portfolio firms harboring plans to gain international visibility. Such a given global agenda includes gaining a foothold in the United States market.
According to reports, the Carlyle Europe Technology Partners V fund also plans on working with companies to upgrade management teams. In addition, the endowment’s co-heads also revealed that the initiative would accelerate growth through Mergers & Acquisitions (M&A) transactions.
Existing CETP Investments
Presently, the fund has two investments, the first of which is the Euro Techno Com Group (ETC). This group is a value-added distributor of telecoms equipment which Carlyle sold to fellow equity firm Cinven in June. The sales development enabled Carlyle to roll on a minority stake into its new fund.
The second investment in the CETP V fund is digital marketing agency Incubeta, which Carlyle acquired earlier this month. Incubeta is an international melting pot of marketing, technology, data, and creative experts seeking to leverage digitization opportunities for businesses. The platform boasts a suite of prominent clients such as Netflix (NASDAQ: NFLX), Disney (NYSE: DIS), Amazon (NASDAQ: AMZN), and Google (NASDAQ: GOOGL). Other Incubeta selected clients include Liverpool FC, HBO, NBCUniversal, Charlotte Tilbury, Hyundai, Heineken, L’Oréal, and Shoprite.