Carlyle Group, the US private equity firm, apologised to shareholders on Tuesday for a "lapse in communication" after extending a second $100m (€73m) loan to a mortgage-backed securities fund it listed last month on Euronext Amsterdam.

The apology and rescue loan - the second in as many weeks - were an attempt by Carlyle to draw a line under the crisis at Carlyle Capital Corporation (CCC), which has suffered a steady stream of bad news since floating on July 4.

Announcing a $900m asset sale to cover margin calls by lenders, the Guernsey-based fund said worried investors had asked for details of its asset portfolio, but received only press releases and website information in reply.

"Because CCC ... is subject to various rules and regulations pertaining to selective disclosure, we relied on our press releases and our website instead of communicating directly with individual shareholders," it said in an e-mail to investors on Tuesday.

John Stomber, CCC chief executive, added: "We understand these efforts have been unsatisfactory and frustrating to many of you. We sincerely apologise for this lapse in communication."

The shares fell $1 to $14, well below their issue price of $19.

Carlyle's difficulties raise questions about how quoted private equity firms will cope with the extra demands of being publicly listed.


CCC has suffered as the US subprime mortgage crisis hit the AAA rated mortgage-backed securities issued by Fannie Mae and Freddie Mac, the government-sponsored institutions, which account for 95 per cent of its portfolio.

The fund said its business model was designed "to withstand a liquidity event equal to the events of October 1998 when the demise of Long Term Capital Management threatened the financial markets". It added: "The recent liquidity disruption is significantly worse than the events of 1998."

It sold $900m of assets, including collateral loan obligations and mezzanine debt securities, which were bought by Carlyle at cost price. It also sold bank loans and was freed from a commitment to invest $75m in another Carlyle fund.