A GUERNSEY-BASED investment firm has been forced to seek a $200m. lifeline from its US parent because of the American house price slump. Carlyle Capital Corporation, which has $22.7bn tied up mostly in mortgage-backed securities, raised $322m. only last month by floating on the Amsterdam-based Euronext exchange, but is still struggling to meet commitments to its lenders.

Guernsey Financial Services Commission director-general Peter Neville said the commission was not in a position to comment on specific cases, but that the latest market problems concerning sub-prime investments still remained.

The commission has already contacted all Guernsey firms it believed to be at risk, he added.

‘There appeared to be one or two pockets of higher exposure so we could not say that the problems would not affect any funds here.’

However, Mr Neville said that the majority of funds in Guernsey were diversified, with only a few being specialised in the areas of particular concern.

‘As far as banks’ mortgage lending is concerned, as I said, Guernsey banks’ lending to hedge and private equity funds tends to be short-term for liquidity purposes and not for long-term gearing of funds.

‘This makes them generally less vulnerable to the current market difficulties than might otherwise be the case.’

Disgruntled clients of Carlyle Capital Corporation have accused the company of failing to keep them informed of events.

In an open letter to investors, chief executive John Stomber said a liquidity squeeze across markets was worse than the crisis caused by Long-Term Capital Management’s demise in 1998.

Because its investments are worth less, the Channel Island firm’s lenders have demanded extra collateral. To meet these requirements, it has offloaded 5% of its assets for $900m. – at a loss of up to $40m.

Its Washington-based parent, Carlyle Group, has loaned $100m. in seven days to help it meet commitments.

‘We designed CCC’s business model to withstand a liquidity event equal to the events of October 1998 when the demise of Long-Term Capital Management threatened the financial markets,’ said Mr Stomber in his letter.

‘We believe the recent liquidity disruption is significantly worse than the events of 1998.’

Carlyle Capital joins a long list of institutions hit by the collapse of the US sub-prime mortgage industry. Kohlberg Kravis Roberts, Carlyle’s private equity rival, has seen a similar liability develop at its offshoot, KKR Financial Holdings.

Mr Stomber acknowledged that the firm’s communication of its problems might have been ‘unsatisfactory and frustrating’.

Before its public offering, Carlyle Capital insisted that it specialised in triple-A rated securities and was ‘as far away from sub-prime as you can possibly get’.

* Sub-prime refers to the practice of lending to borrowers with a poor credit history and/or inadequate assets to guarantee the loan.