NEW YORK, DEC. 7 -- Billionaire investor George Soros has agreed to invest $100 million in a new buyout fund to be managed by the Carlyle Group, a Washington-based investment firm, according to sources familiar with the deal.
The fund, Carlyle Partners II L.P., is expected to raise $500 million to be invested in two ways: First, in leveraged buyouts of manufacturing companies with fairly stable profits, and second, in privately held companies with exciting growth prospects that plan to go public within a few years.
For Carlyle, the commitment from Soros Fund Management represents a kind of financial blessing from one of the current high priests of investing. Carlyle is best known for its high-octane political connections, which include former defense secretary Frank Carlucci, former secretary of state James A. Baker III and Richard G. Darman, former director of the Office of Management and Budget.
It also indicates that Carlyle's investing style -- taking positions in industries in the midst of regulatory reform or economic consolidation such as defense and telecommunications -- is gaining in popularity on Wall Street.
"We are very pleased with the Soros relationship and have enormous respect for that organization's achievements," said David Rubenstein, a managing director.
Soros is a veteran international speculator who manages about $11 billion and has earned more than 30 percent a year on his money for the past 20 years. He drew attention last year by aggressive currency trading that pitted him against European central banks, which netted him and his funds more than $1 billion in profits.
He operates the Quantum mutual fund and several "hedge funds," private pools of money that use tremendous borrowings to speculate on all kinds of securities and properties. Soros's customers are among the world's richest families, most powerful companies and prestigious universities and philanthropies.
Soros has invested $25 million to $50 million in Carlyle deals in the past four to five months, according to the sources.