Carlyle Group Inc. has established a $4.1 billion credit line that ties borrowing costs to how well its portfolio companies achieve board diversity goals.
The buyout firm has structured the revolver for its Americas corporate private equity funds, with pricing of the debt depending on whether they meet a previously set target of 30% diverse directors on their boards within two years of ownership.
The three-year facility will serve as a subscription line for the funds, providing Carlyle with cash that may be immediately used to fund acquisitions. The money would then be repaid once capital is called from the funds’ investors, a Carlyle representative said.
It’s the largest environmental, social and governance-linked facility of its kind in the U.S. and the first to exclusively focus on board diversity, Carlyle said in a Wednesday statement.
“We are improving outcomes with an innovative financing vehicle for our corporate private equity funds that directly supports the firm’s ongoing commitment to increasing board diversity,” Carlyle’s Chief Executive Officer Kewsong Lee said.
By Lisa Lee
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