Carlyle Group's Mid-East woes

The Carlyle Group had high hopes when it made its foray into the Mid-East. But the dream of tapping the region as a major source of funding has died. As of now, the private equity giant can only be thankful that the Dubai World fiasco is deflecting attention.

The Financial Times reports that a prominent Kuwaiti firm has sued Carlyle locally, in the wake of the blow-up of the firm's public debt fund, which collapsed in early 2008. No surprise the fund invested in mortgage-backed securities. The decision to sue by National Industries Group, which invested $50 million in the fund, followed "a stormy meeting in Kuwait involving Carlyle co-founder David Rubenstein and Saad Al Saad, the head of NIG and head of one of Kuwait's wealthiest families.

"The meeting was abruptly terminated after a young Carlyle staffer told the NIG executives to lower their voices," the FT reported. Rubenstein wanted to apologize and offer to cut fees on any additional investment, an offer that did little. 

For more:
- here's the Financial Times article

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