Sources familiar with the Carlyle Group's plans, who asked not to be identified, said David Rubenstein, the firm's charismatic leader, co-founder and managing director, has spent the past 15 months analyzing and rejecting several avenues back into hedge fund land after the firm's first abortive attempt.
Mr. Rubenstein, who was an aide in the Carter administration, reportedly flirted with the idea of setting up an internally managed, multistrategy hedge fund and with acquiring a hedge fund or hedge fund-of-funds company. Ultimately, Mr. Rubenstein and his partners decided to build, rather than buy.
One source, who asked not to be identified, said the partners cautioned him to be careful, since the firm's first attempt to penetrate the hedge fund world ended abruptly in June 2003.
Carlyle Group started its first hedge fund of funds business, Carlyle Asset Management Group, Washington, in April 2001. Afsaneh Mashayekhi Beschloss, who was treasurer and chief investment officer of the World Bank, New York, was recruited to head the Carlyle unit.
Several sources who know Carlyle Group well said a culture clash between Carlyle Group executives and Ms. Beschloss' hedge fund team existed from the outset. In addition, one source who asked not to be identified said Ms. Beschloss' "natural constituency" — public pension plans — was not comfortable with the Carlyle Group's political associations.
Carlyle Group has had a habit of appointing politicians as managing directors; examples include John Major, former U.K. prime minister, and President George H.W. Bush. Both men are no longer involved with the firm.