Regulation  

Court finds in favour of US asset manager

Court finds in favour of US asset manager

US-based asset management firm The Carlyle Group has won a civil case over whether it breached its duties when managing a fund, leading to investment losses in the 2008 financial crisis.

The ruling is thought to be the largest in Guernsey’s history and was handed down by the island’s Royal Court this week.

The Carlyle Group, as well as two of its subsidiaries, were cleared of liability over the collapse of Carlyle Capital Corporation, a Guernsey investment fund that went into insolvency in the wake of the financial crisis.

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The fund invested primarily in AAA-rated residential mortgage-backed securities.

More than 187 claims were pursued against The Carlyle Group companies and its seven executive and non-executive directors but these were all dismissed.

Jeffrey Ferguson, Carlyle's general counsel, said: “We are pleased that the court confirmed that Carlyle and Carlyle Capital Corporation directors acted in a manner they believed to be in the best interests of Carlyle Capital Corporation and its shareholders during the financial crisis.

“We are gratified by the Guernsey court’s decision, and we are deeply appreciative of the time and effort the court and its staff devoted to this case.”

The case was valued at more than £1bn, making it the largest in Guernsey’s history by financial value, duration and the number of documents filed.

Simon Davies, global head of dispute resolution at Ogiers, who represented The Carlyle Group in court, said his client had been vindicated.

He said: “This has been a long and thorough process and the judgement of the court is very clear – The Carlyle Group entities acted entirely properly, and in the interests of Carlyle Capital Corporation and its shareholders.”

The Carlyle Group, which is based in Washington DC, has more than $170bn (£142bn) in assets under management.

damian.fantato@ft.com