The co-founder of US private equity giant the Carlyle Group said in an interview published yesterday that his company was analyzing ways to compensate investors in a failed investment fund.
David Rubenstein's interview with the Financial Times came a day after shares in Carlyle Capital Corp (CCC) closed with massive losses after it said negotiations with creditors to prevent its liquidation had been unsuccessful, and it defaulted on nearly US$17 billion in debt.
The Carlyle Group said in a statement on Thursday that it expected lenders to take possession of the fund's remaining residential mortgage-backed securities assets.
Carlyle said it had worked "exhaustively" to assist Carlyle Capital and took "extraordinary measures" to help it through its liquidity crisis.
"We have stood behind our products in the past and we are working on ways to address the losses that are being suffered by investors," Rubenstein told the business daily.
He said Carlyle was examining various legal issues to do with compensating CCC shareholders, as the fund was a separate legal entity to the Carlyle Group.
Shares in CCC closed on Thursday down 87.5 percent at 0.35 euros, taking total losses in the past week to 97 percent.
CCC is one of 55 funds managed by US-based Carlyle Group, one of the largest private equity firms in the world with some US$80 billion in assets.
Rubenstein said he did not think that "one fund out of 60 will spoil a reputation built up over 20 years.
The Carlyle Group also owns companies ranging from TV ratings firm Nielsen and doughnut seller Dunkin' Brands to former General Motors unit Allison Transmission.
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