Carlyle to launch new fund in China
Carlyle Group LP, a US private equity firm, said on Thursday that it is raising its second renminbi-denominated fund and plans to accelerate investment in China to tap the growth opportunities in the country.
The Washington-based company is also raising an Asia buyout fund that targets a value of about $6.5 billion. A significant amount of the fund is expected to be invested in China as well, according to people with knowledge of the matter.
David Rubenstein, Carlyle’s co-founder and co-executive chairman, said that China’s vast market and enormous growth potential, as well as its strong entrepreneurial spirit and supportive government, have made the country the most attractive investment destination for the firm outside of the US.
Carlyle has been investing about $500 million to $1 billion annually in China, and the new Asia buyout fund will help the firm to increase its investment pace in China, according to David Marchick, managing director and global head of external affairs at Carlyle.
The firm said it will focus on investment opportunities in sectors including consumer retail, healthcare, education and financial services.
China’s tighter regulation on shadow banking will likely make private equity investment a more attractive financing option for local Chinese firms that face limited access to direct financing, Marchick added.
An active investor in the Chinese market for 20 years, Carlyle Group had invested $7.5 billion in China in 90 deals as of last September, which accounted for half of Carlyle’s presence in Asia.
One recent high-profile China deal was Carlyle’s $2 billion purchase of US fastfood chain McDonald’s China operations in partnership with State-owned CITIC Group.
Rubenstein said the partnership with CITIC has been successful and Carlyle can “dramatically grow” the franchise in China.
The private equity firm is considering adjusting McDonald’s menu in China to compete with its rivals such as KFC, which has more restaurants in the country.
“It turns out that Chinese people like chicken more than burgers. I think we will spend more time on chicken-related offerings,” Rubenstein said.