Kuwait-based conglomerate National Industries Group, which invested $50m in Carlyle Group’s affiliate, Carlyle Capital Corp (CCC), is suing Carlyle Group alleging that the US private equity company has misrepresented the health of its affiliate, reported The Financial Times.
Reportedly, CCC was marketed to many investors in other Carlyle funds as a safe fund. It had raised about $600m from investors privately and an additional $340m when it listed.
However, the public debt fund emerged as one of the first victims of the financial turmoil, due to its high leverage that made it sensitive to small moves in prices. It collapsed in March 2008 and liquidated its assets as it could not meet margin calls from its lenders. Subsequently, investors lost all their money.
