Carlyle’s Special Situations & Corporate Opportunities team specializes in making alpha-driven debt and equity investments in companies that offer downside protection but with the opportunity to unlock substantial upside potential. The team specializes in investing in (i) distressed, complex, or underappreciated assets, (ii) cyclical, contrarian, or event-driven situations and (iii) broader market dislocations to identify attractive investment opportunities. The Special Situations & Corporate Opportunities franchise was launched in 2004 and today the team actively manages two funds: Carlyle Strategic Partners II (CSP II) and Carlyle Strategic Partners III (CSP III). In an effort to maximize returns and value, the team seeks to exert influence or obtain control in its investments whenever possible. The team is co-headed by Shary Moalemzadeh and Ian B. Jackson.
The Special Situations & Corporate Opportunities team utilizes its specialized expertise to acquire the debt and equity of operationally sound, financially distressed companies. The team focuses on industries in which Carlyle has extensive experience; including aerospace, automotive, consumer, defense, energy, healthcare, industrial, media, power, retail, technology, telecommunications and transportation. We believe our ability to leverage synergies across the broader Carlyle Group and identify investment opportunities across the Global Market Strategies platform is a significant competitive advantage.
We have a lean investment process and a flexible mandate with the ability to invest at all levels of the capital structure to maximize risk-adjusted returns: in bank loans, public debt, structured equity and public as well as private equity. This flexibility allows us to react swiftly to changing market conditions. Our investment track-record demonstrates our ability to generate highly attractive returns throughout the economic cycle and independent of the default rate environment. The team’s investments range from distressed corporate debt and equity securities to real assets, underinvested, liquidity constrained businesses and healthy companies with the potential to unlock value through access to growth capital and a strong sponsor. Our investment horizon spans from short duration investments targeting high IRRs to long duration private equity style investments targeting high multiples of invested capital. We are active investors and seek to obtain influential or controlling interests in investments whenever possible. This enables the team to drive returns and value by influencing the direction of its portfolio companies at the board and senior executive levels.
Capital preservation is paramount to us and as a result, the team employs a private equity approach to due diligence for each investment with a focus on downside protection and a sufficient margin of safety. Once we make an investment, we create value through operational improvements, capital structure optimization and investments in growth, either organic or through add-on acquisitions. We draw upon Carlyle’s established network, deep industry expertise and Corporate Private Equity and Global Market Strategies platforms to give us the competitive edge of a strategic player in a market dominated by financial investors.
In addition, the Special Situations & Corporate Opportunities group uses the Carlyle network to support the management teams of portfolio companies. We do not act as managers but look to support management by committing capital to attractive growth opportunities and by supporting profit improvement and growth initiatives. We select managers who can build upon a company’s strengths while also shoring up areas of weakness. In addition, Carlyle’s industry focus enables the team to appoint Board members who have extensive sector experience and can provide critical insights into the issues shaping a portfolio company’s future.