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 The new fund adds to an estimated record $140 billion of uninvested
capital, or dry powder, that private equity firms have raised for
the region, prompting worries that there is too much money chasing
too few deals.
But Carlyle's co-head of Asia buyouts, X.D. Yang, dismissed those
concerns.
"The regional economy has become much, much bigger. Ten years ago a
$500 million equity investment was huge, but today it's a
medium-sized deal," Yang told Reuters in an interview.
"The companies are getting bigger, the economies are getting bigger
and the private equity funds and deals are getting bigger," he
added.
Carlyle Asia Partners IV, which will invest in deals in Asia
excluding Japan, is 53 percent larger than the firm's previous fund
for the region, and exceeded its target of $3.5 billion.
It is second only to KKR & Co's $6 billion Asia fund raised last
year, and has already invested $700 million in equity in security
systems firm ADT Korea.
By comparison, since the close of KKR's fund in July last year, KKR
has announced eight deals which if completed would be worth around
$2 billion in equity.
Carlyle is also raising funds for a separate fund to invest in
Japan, aiming to gather as much as $1 billion, investors with
knowledge of the plans have told Reuters.
FEES CUT
The fundraising for Carlyle's fourth Asia fund was not easy, with
KKR's record fund as well as other rivals providing stiff
competition for capital. Like others in the industry, Carlyle cut
its fees and brought in high net worth investors to help with the
fund-raising.
Investors with direct knowledge of the matter said Carlyle reduced
its management fees to 1.5 percent from the usual 2 percent. It also
hired Goldman Sachs <GS.N> to raise money from the bank's private
wealth clients, at a fee of 3 percent of capital raised. They
declined to be identified as Carlyle has not made the details
public.
Carlyle declined to comment on aspects of its fundraising. A
representative for Goldman Sachs was not immediately available for
comment.
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Yang said many of Carlyle's investments over the next five to seven
years would be in companies likely to benefit from strong economic
growth in the region.
He believes restructurings of China's state-owned enterprises, like
the one being conducted at oil giant Sinopec Corp, as well as growth
in the country's emerging technology companies offer opportunities
for big ticket deals.
"Look at the new economy in China, and you see the scale of
companies like Alibaba [IPO-BABA.N]. That's a sector where you could
see someone make a $500 million investment at the right time, and
maybe achieve a $5 billion profit," he said.
Yang, who joined Carlyle in 2001 after stints at Merrill and
Goldman, is the man behind the firm's signature Asia deal, an
investment in China Pacific Insurance (Group) Co Ltd (CPIC).
It gave Carlyle its biggest dollar profit on an investment globally,
with the private equity firm garnering a total profit of over $4
billion - five times the amount it invested between 2005 and 2007
for a 17 percent stake.
(Reporting by Stephen Aldred; Editing by Edwina Gibbs)
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