Carlyle raises $6.55B for new Asia fund

HONG KONG - 21 June 2018: Carlyle Group (CG.O) said on Thursday it had raised $6.55 billion for its Asia private equity fund, its biggest ever, which will seek buyout and strategic investment opportunities across a wide range of sectors in the region.

The latest fund is more than Carlyle’s initial target of $5 billion and 65 percent bigger than its previous Asia buyout fund, said the U.S.-based private equity firm with $201 billion of assets under management globally.

Reuters reported last month, citing people with knowledge of the matter, that Carlyle had raised its Asia fundraising target following a strong response from its investors and that it was looking to close the fund at $6.5 billion.

“We expect to see more and larger investment opportunities in the region driven by innovation, attractive demographics, rising consumption and corporate spin-offs,” X.D. Yang, chairman of Carlyle Asia excluding Japan, said in a statement.

Investor interest in Asia-focused private equity has grown as deals have increased in size following corporate restructuring and as global private equity funds make headway in key markets, including China, India and Japan.

Carlyle, together with more than a dozen investors including Singaporean sovereign wealth fund GIC Pte Ltd [GIC.UL] and state investor Temasek Holdings (Private) Ltd [TEM.UL], as well as U.S. private equity firm Warburg Pincus LLC, joined Ant Financial Services Group’s latest $14 billion fundraising, the world’s largest ever.

The Asian region has become a key battleground for global financial sponsors - a total of 342 funds raised a combined $107 billion in Asia last year, according to data provider Preqin.

U.S.-based KKR & Co [KKR.N] closed a new Asia-focused buyout fund in June last year after raising $9.3 billion, a record for the region. The record could soon be broken by Chinese investment firm Hillhouse Capital Group, which has received commitments of over $10 billion in a new private equity fund, according to people familiar with the fundraising.

Carlyle is also in the process of raising a Chinese yuan fund of 4 billion ($629 million) that would target opportunities in the world’s second-largest economy, a person with direct knowledge told Reuters last month.

The Washington, D.C.-based firm’s existing portfolio firms in Asia range from a stake in Chinese internet giant Tencent’s (0700.HK) e-book unit China Literature (0772.HK) to Metropolis Healthcare, an India-based global operator of pathology laboratories.

The investments generated an 18 percent net internal rate of return in its last $3.9 billion Asia fund by the end of March, according to its first-quarter earnings report.