New York (HedgeCo.net) – The Carlyle Group is one of the largest alternative investment firms in the world, but the Washington D.C. based firm may not be as big if investors listen to a noted financial consultant.

Cliffwater LLC is an influential hedge fund advisory firm based in Marina del Rey, California and it has advised its clients to pull their money out of the Carlyle Group’s hedge fund Claren Road Asset Management LLC. According to a report from the Wall Street Journal, Cliffwater represents clients with approximately $800 million in assets with Claren Road.
The report from the Journal reported that assets under management for Claren Road have dropped sharply in the past ten months, falling from $8.5 billion last September to $4.9 billion recently. Investments in Greece, Fannie Mae and Freddie Mac were cited as the reason for the drop in assets.

Claren Road could see an additional drop in assets if Cliffwater’s clients heed the warning, but as the Journal noted, “Some of Cliffwater’s clients might choose not to follow its advice, or may not be able to anytime soon—some investors agree to lock up their money for longer in exchange for lower fees, for example, and investment committees may meet infrequently to make such decisions.”

Rick Pendergraft
Research Analyst.
HedgeCoVest