The hedge fund-of-funds effort was moderately successful because of the firm's famous group of influential rainmakers — ex-politicians, business titans and heads of federal agencies such as Arthur D. Levitt, Louis V. Gerstner Jr. and William E. Kennard — did attract about $400 million of assets and commitments in just two years.
But in June 2003, Carlyle Group announced it would sell 60% of Carlyle Asset Management group to Ms. Beschloss and her management team. The remaining stake was sold earlier this year to the management team, which is now Rock Creek Management LP, Washington, said Christopher Ullman, Carlyle Group's vice president of corporate communications.
Rock Creek's success since gaining independence has been strong, with assets under management in hedge fund of funds strategies totaling about $1.7 billion, according to industry sources.
Ms. Beschloss was traveling and unavailable for an interview, as were other company officials, said Mark Serrano, a Rock Creek spokesman. Carlyle Group's Mr. Ullman said Mr. Rubenstein was unavailable for an interview.
Some sources said Carlyle Group's re-entry into hedge funds is logical.
"I'm only surprised at how long it has taken for them to get back into hedge funds," said Michael Zimmerman, a partner at hedge fund-of-funds manager Tower Capital Inc., New York.
"Carlyle Group continues to look for growth trends in alternative asset classes and invests in them. Their objective is to create the Fidelity of alternative asset managers. It will be fairly easy for them to add more investment platforms: After all, they already have private equity, real estate, venture capital, as well as regional and sector-specific funds," Mr. Zimmerman said.