December 2, 2009 / 1:18 PM / 10 years ago

UPDATE 3-Carlyle Group to announce Brazil deals soon

* Carlyle to announce two or three deals in Brazil

* Co-founder Rubenstein says deals in $100 mln range (Adds size of deals, 2d paragraph)

By Guillermo Parra-Bernal

SAO PAULO, Dec 2 (Reuters) - U.S. private equity firm Carlyle Group [CYL.UL] plans to announce two or three deals soon in Brazil, Latin America’s largest economy, co-founder David Rubenstein said on Wednesday.

The deals could run “in the hundred-million dollar area” , Rubinstein said on the sidelines of an industry conference in Brazil’s financial capital, Sao Paulo. He declined to elaborate on the assets involved or give a timetable.

Interest by global buyout firms in emerging markets has swelled over the past year as evidence arose that China and Brazil will emerge stronger from the global recession than most developed economies, he said.

“I think private equity firms that are entering Brazil need to recognize that you only make money when the economy grows,” Rubenstein said.

“We also recognize that Brazil is the fifth most populous country in the world and its GDP will probably be the fifth-largest in the world in the next decade, so we need to be here,” he added.

Brazil’s economy has emerged from a six-month recession and is expected to expand by as much as 5 percent in 2010, luring billions of dollars from foreign investors seeking to benefit from growth in the country.

Dealmakers will probably look at the size of the domestic economy, foreign trade patterns and political stability to seek buyouts in Brazil and China, Rubenstein said.

But global private equity firms like Carlyle Group will likely expand faster in China than in Brazil because of the size of the Asian nation’s population and economy, he added.

Carlyle Group and state-run Banco do Brasil (BBAS3.SA) are working to structure a fund aimed at Brazilian institutional investors, Rubenstein said without elaborating further.

Banco do Brasil Chief Executive Aldemir Bendine told Reuters in an interview last week the bank had raised nearly 840 million reais for a fund to invest in agribusiness and was working to launch more of those funds in the near future. [ID:nN27421948]

Rubenstein also said private equity firms should recognize that deals in the range of $10 billion-$20 billion are not possible now, given the lack of credit in global markets. Banks are willing to lend less and charge more interest and fees to arrange loans for buyouts, he added.

Rubinstein added that Carlyle has not decided whether to sell shares in an initial public offering. Carlyle has been considering going public since at least 2007, when larger rival Blackstone Group sold shares for the first time. (Additional reporting by Megan Davies in New York; Editing by Richard Chang, Leslie Gevirtz) ((elzio.barreto@thomsonreuters.com; +55 11 5644-7725; Reuters Messaging: elzio.barreto.reuters.com@reuters.net))

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