Carlyle targets $5b for Asia buyout fund

Carlyle Asia Partners V has already launched and investor relations executives are talking about a first close in October, according to sources familiar with the situation. Carlyle is also in the process of raising its latest Asia growth fund, which has a target of $1 billion. Commitments totaled $264 million as of March, including up to $25 million from the International Financial Corporation (IFC).

The private equity firm established a presence in the region in 1998 and now has offices in Australia, China, India, Indonesia, Japan, Korea and Singapore. When the previous Asia buyout fund closed, Carlyle had invested $14.1 billion in equity across the region. As of March, that fund was 60% deployed and had delivered a multiple of 1.5x, almost all of it unrealized.

Since then, the GP has agreed to buy Australia-based iNova Pharmaceuticals for $930 million in a joint deal with Pacific Equity Partners. It has also led an investment of more than $100 million in Indian delivery e-commerce logistics service Delhivery and teamed up with State Bank of India to purchase GE Capital’s position in domestic credit card franchise SBI Card.

In addition, the $2.1 billion acquisition of the master franchise rights to the McDonald’s business in China and Hong Kong – announced in January – was not expected to close until the middle of 2017. Carlyle took a 28% stake in the business, with CITIC Capital and the Hong Kong-listed unit of CITIC Group owning 20% and 32%, respectively. McDonald’s will retain the balance.

A sizeable part of the Fund IV performance is driven by Chinese outdoor advertising business Focus Media, which was privatized for $3.7 billion in 2013. Carlyle was the largest PE participant in the consortium. The company relisted in Shenzhen in late 2015 at a valuation of RMB45.7 billion ($7 billion). It is currently worth around RMB105 billion. Two other members of the consortium recently announced plans to exit their holdings.

Carlyle has come to the market not long after KKR left it, having taken less than seven months to close its third pan-Asian fund at $9.3 billion – a significant uptick from the $6 billion raised for Fund II. Meanwhile, TPG Capital is targeting up to $4.5 billion for its latest regional fund and The Blackstone Group is reportedly seeking $3 billion for its debut Asia-dedicated vehicle.

Carlyle differs from its global and regional peers in that there is a separate fund for Japan; the most recent vintage closed at just under $1 billion in September 2015. However, AVCJ understands that the new Asia buyout fund will have the option to invest alongside the Japan vehicle in certain deals, allowing Carlyle to take on larger transactions in the country.

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• Topics
• Fundraising
• Buyout
• GPs
• Asia
• The Carlyle Group