New York (HedgeCo.net) – The last two years have been tough for Carlyle Group LP. There have been fund closings, layoffs and departures of key personnel. Now the company has announced that they will shut down the fund-of-fund unit Diversified Global Asset Management (DGAM).

Carlyle acquired DGAM two years ago and at the time it was representative of the company’s push to expand and in April 2015 the unit had approximately $6 billion in assets under management. However, over the course of the last year, the unit’s distributable profits fell approximately 70% according to a recent Reuters’ report.

“Unfortunately, the challenging market environment made it difficult to scale in fund-of-hedge funds and liquid alternatives,” Chris Ullman, Carlyle’s head of global communications, said in an emailed statement.

The closing of DGAM is expected to take place over the next few quarters and indications are that the closure will produce some additional expenses for Carlyle. After DGAM’s closure, Carlyle will still have two fund-of-fund units: Metropolitan Real Estate Equity Management and AlpInvest Partners.

Rick Pendergraft
Research Analyst
HedgeCoVest