(Bloomberg) -- Carlyle Group Inc. is readying its first European private credit fund for wealthy individuals as it joins giants such as Blackstone Inc. in a race to tap the trillions of dollars held by the continent’s rich investors.

The new fund will invest across a range of financing strategies and focus on lending to European businesses. There are plans to roll out more in the coming months, both in Europe and the US, as the wealthy are now a priority, Shane Clifford, who joined Carlyle last year to head its wealth strategy, said in an interview.

“We have to be present and active in Europe, it’s our second market,” said Clifford, who was previously at Franklin Templeton. He added that Carlyle has brought aboard a head of product in New York and is in the process of hiring for its wealth team globally, including in Europe and Asia. 

Carlyle manages just $6 billion across similar retail funds in the US, a small amount compared to rivals. The firm has raised about $50 billion from wealthy clients over the years.

Global money managers such as Blackstone have been chasing wealthy clients around the world for years. Now a slew of firms from Apollo Global Management Inc. to Ares Management Corp. are also ratcheting up efforts to seek new sources of capital. With the traditional investor base of pensions and endowments turning more cautious amid high interest rates and geopolitical risks, Europe is one focus of the latest push.

Carlyle’s entry into this market underscores Chief Executive Officer Harvey Schwartz’s attempts to expand its client base beyond the mainstay big institutions. He has been under pressure from shareholders to help boost its languishing stock price and articulate a clear vision after years of leadership churn. He told analysts this month that he believes Carlyle’s brand will be an asset in its push for wealthy clients.

The new fund, called the Carlyle European Tactical Private Credit Fund, will generally allow withdrawals amounting to 5% of the fund’s net asset value each quarter to accommodate smaller investors who typically seek some assurance that they can draw cash. But in some circumstances, it may also exercise the right to suspend redemptions.

The standard share class will charge a fee of 1.2% of net asset value and also has an incentive fee of 12% after the manager hits a 4% hurdle.

But the Washington-based private equity firm, which manages $426 billion in assets, is likely to find Europe more challenging than the US. Even some of its bigger rivals who have long established a foothold there are taking longer to raise money. The main challenges are risk aversion — many European investors prefer to keep most of their money in cash, according to a study by Morningstar Inc. —  a fragmented market with different languages and various levels of regulation in each country.

Blackstone’s ECRED fund, which launched in October 2022, managed about €500 million ($539 million) in assets at the end of last year, according to company documents. In contrast, its US-focused BCRED fund that launched in 2021 has roughly $50 billion in total asset value. 

“It is a long-term strategy for this firm to be committed to the wealth space in Europe,” Carlyle’s Clifford said. 

(Updates third paragraph to note that Shane Clifford was previously at Franklin Templeton.)

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