Carlyle targets first-close of new Asia buyout fund at over $4 billion: sources

HONG KONG (Reuters) - Carlyle Group CG.O is targeting the first closing of a new Asia buyout fund within the next couple of months at over $4 billion, three people familiar with the matter said, bulking up in a region that has become a key market for global funds.

A general view of the lobby outside of the Carlyle Group offices in Washington, U.S. May 3, 2012. REUTERS/Jonathan Ernst/File Photo

The U.S. private equity titan’s fundraising is part of its planned $5 billion Asia buyout fund, the people said, which, if completed, would be its biggest capital-raising exercise for Asia.

First closing is an important milestone for private equity fundraising because it means the fund has crossed a minimum threshold and could begin making investments.

Carlyle co-CEO David Rubenstein said last month during the firm’s earnings call the firm is aiming for first closings of the Asian buyout fund and a similar U.S. fund in the second half of this year, without disclosing the target fund sizes.

The company separately continues to raise capital for an Asia growth fund, meant for investing in smaller but high growth companies in major regional economies, one of the people told Reuters.

Carlyle declined to comment. The three people declined to be named as the details of the fundraising plans were not public.

Global private equity firms are adding cash reserves, or so-called dry powder, in the region, as investors worldwide allocate capital to catch growing market and economic momentum in countries including China and India.

Blackstone Group LP BX.N is seeking to raise up to $3 billion in its first pan-Asia buyout fund for investments in sectors including high-end manufacturing and healthcare, people familiar with the plan told Reuters in July.

KKR & Co KKR.N closed a new Asia-focused buyout fund in June after raising $9.3 billion, a record for the region.

Carlyle has said it aimed to raise $100 billion globally in the next few years.

Its total assets under management was $170 billion at the end of the second quarter.

Earlier this year, Carlyle merged its Asian buyout and growth teams to target investment opportunities more effectively and to better utilize team expertise, but will continue to make investments from separate funds, the people said.

Carlyle plans to boost its investments in Japan through the new Asia buyout fund, even though it has a small country specific fund for that market, one of the people said.

The private equity firm started raising its fifth Asia growth fund last year. As per a March disclosure by the International Finance Corp, which became an investor in the fund, the growth fund was targeting $1 billion.

The firm’s Asia funds, which since inception have delivered net internal rate of returns in the range of 6 to 18 percent by the second quarter of this year, have invested in firms from sectors including consumer and technology, with a focus on China, its portfolio records show.

Reporting by Sumeet Chatterjee and Kane Wu; Editing by Muralikumar Anantharaman