Headquartered in Washington DC, Carlyle arranged to acquire $7.7 billion in unsecured personal loans from Truist as it builds out its asset-backed credit platform. The portfolio consists largely of fixed interest rate loans extended to borrowers with strong credit, described as prime and super prime, per a statement released Friday.
"Banks are increasingly turning to firms like ours because we have the ability to handle and manage very large pools all at once and can move quickly," said Akhil Bansal, Carlyle's head of asset-backed finance, who noted the purchase will be funded via term loans provided by several banks. "That can offer more certainty of execution for sellers."
A little over two years ago, Carlyle and KKR & Co teamed up to acquire $10 billion in student loans from Discover Financial Services, underscoring the firm's appetite for large consumer loan portfolios.
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For Truist, the sale supports a strategy from newly installed CEO Mike Lyons to emphasize core areas such as its deposits franchise and corporate operations, while scaling back other activities. The Charlotte-based bank recently reached an agreement with Apollo Global Management Inc. to sell $5.5 billion in auto loans, effectively ending its near-prime auto lending business. Lyons became CEO just under two months ago, with investors looking for renewed growth after BB&T Corp. and SunTrust Banks Inc. merged in 2019 to form Truist.
The move fits a wider trend. Since tougher post-2008 capital rules took hold, banks have reduced exposure to consumer-facing assets and directed more lending toward large asset managers that are willing to take on consumer debt.
Like other big managers, Carlyle is pushing deeper into asset-backed credit, a financing approach in which transactions are backed by specific assets rather than corporate earnings. Beyond consumer portfolios, recent activity includes the $1.2 billion purchase of oil and gas properties and related assets in Oklahoma from Camino Natural Resources.
In plain English: banks are lightening their consumer books, and private credit firms are stepping in with speed and scale. That can change who holds consumer credit risk and influence pricing and liquidity in credit markets. Watch Carlyle's fundraising for asset-backed strategies and Truist's capital and profitability metrics as this shift plays through your portfolio.
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