Carlyle's Beijing fund reaches $354m first close

The global private equity firm has raised almost half of its target for the Carlyle Beijing RMB fund.

The Carlyle Group has raised more than RMB2.4 billion (€271.1 million; $354.3 million) for the first close of Carlyle Beijing RMB Fund, which is targeting commitments of RMB5 billion.

Limited partners in the fund include Beijing State-owned Capital Operation and Management Center (BSCOMC), Beijing Equity Investment Development Fund, which is a fund of funds set up by the Beijing Municipal Government, other large state-owned enterprises, private companies and individuals, the firm said in a statement.

The fund will invest in large growth companies in Beijing and across China. On average, the fund will invest about $75 million per transaction, a Carlyle spokeswoman said in January, when the firm signed a memorandum of understanding with Beijing Municipal Bureau of Financial Work to set up the RMB fund.

In addition, Carlyle has set up an investment management joint venture with BSCOMC, in which it holds an 80 percent stake. The joint venture, Carlyle (Beijing) Investment Management, will serve as the advisor to the Carlyle Beijing RMB fund.

“Through this RMB fund, we will expand our investment capabilities and efforts in Beijing and across China to serve the growing number of Chinese investors,” David Rubenstein, co-founder and managing director of The Carlyle Group, said in a statement.

Set up under a pilot measure introduced by the Beijing government to attract foreign private equity firms to Beijing’s Zhong Guan Cun area, known as China’s Silicon Valley, the RMB fund will invest alongside Carlyle Asia Partners, the firm’s Asian buyout unit, which closed its third USD-denominated fund on $2.55 billion in April and currently manages more than $5 billion.

The fund will be entitled to “preferential policies” offered by the Beijing Municipal Government in accordance with the administration’s policies for Beijing’s financial and other industries, Carlyle said.

This fund is Carlyle’s second RMB-denominated vehicle. In early 2009, Carlyle set up another smaller RMB fund to make growth capital investments, a source told PEI Asia in August 2009. No further details of that fund have been disclosed. 

In May 2008, Carlyle also signed a memorandum of understanding with the Shandong Provincial Government. The MOU said that Carlyle would “dedicate resources, capital and expertise to the region to promote and develop sustainable, long-term commercial enterprises” in return for proactive government recommendations on investment opportunities, according to a statement at the time.

Thus far, Carlyle has invested more than $3 billion in the country across more than 50 transactions.