The Carlyle Group is ramping up its exposure to China.
The Washington, DC-based private equity powerhouse is planning to raise in excess of $500 million for a China-focused real estate fund. The move to launch a country-specific fund is a step up for the firm which has been a significant real estate investor in China via separate accounts. The fundraising plans were revealed by Bill Conway, Carlyle’s co-chief executive, in the company’s first quarter earnings call in April, when he said the firm “would be disappointed if the fund doesn’t get to at least $500 million.” The investment strategy of the fund however was not disclosed.
David Rubenstein, the firm’s other co-chief executive, added that the firm has had a team in China for a while and that it “expects to be a significant investor in Chinese real estate for quite some time.”
Carlyle’s last real estate investment in China – the acquisition of the EC Mall shopping center in Beijing in partnership with Korea’s National Pension Service (NPS) in 2014– did not go as planned.
NPS and Carlyle had entered into exclusivity to buy the 600,000 square foot core asset in a deal valued at RMB 2.4 billion ($367 million; €324 million) but the property was ultimately sold to the Hong Kong-listed retail property REIT, Link REIT for RMB 2.5 billion in March 2015, after the two firms failed to complete the transaction within the exclusivity period.