Carlyle Group set to close hedge fund

The Carlyle Group is shutting down its hedge fund business – pulling the plug after losses last year and a disappointing performance this year. The US private equity firm had a substantial minority stake of about 40% in Carlyle-Blue Wave Partners Management, the hedge fund group formed in April last year with an initial $900m under management. The move pulls the plug on what proved to be an ill-timed diversification, as the fund’s launch coincided with the onset of the credit crunch. The fund lost 17% in 2007, before rising 2% this year. By the time Carlyle decided to liquidate, the group had only $600m under management.