Carlyle Boosts China Presence

Private Equity giant The Carlyle Group has done a deal to create a new Asian fund designated in local Chinese currency in partnership with the government of Beijing.

The equity firm is up front in its release about the nature of the deal. It will get “preferential treatment” from the Beijing municipal government, which could open doors to further deals.

Huo Xuewen, Head of the Beijing Municipal Bureau of Financial Work, said in the release, “We welcome and support the establishment of Carlyle’s RMB fund in Beijing. We believe that with the help of the unique advantages Beijing enjoys as the capital city, the Carlyle Asia Partners RMB Fund and other local and international private equity funds will be able to achieve ideal development and play an active role in the steady and fast growth of Beijing’s economy.”

Carlyle’s new fund will be designated in the local currency, and will target its investments on large Chinese companies, the private equity group said in its release. As part of its deal with Beijing, the Carlyle Asia Partners RMB fund will focus on local enterprises.

"This special relationship with the city of Beijing will give us credibility both in Beijing and throughout China's regions," David Rubenstein, Carlyle's co-founder and managing director, told the Wall Street Journal in an interview. "It's an affirmation that the Chinese government is happy with us that we didn't have before."

That shouldn’t be too difficult for Carlyle, one of the world’s largest private equity firms with $87.6 billion of assets under management committed to 65 funds. Carlyle has previously invested $2.5 billion in China in more than 40 deals.

Prior to the Beijing deal, Carlyle had opened offices in Shanghai and Hong Kong.