Sunday, December 6, 2009

Carlyle Ready to Cash In from China Pacific Life Investment

The Carlyle Group purchased 25% of China Pacific Life for $410 million in December 2005. Their 17.3% stake is currently valued at $5 billion. China Pacific conducted an IPO (Shanghai) in 2007, where Carlyle sold roughly 8% of their investment.

Another planned 900 million share IPO (Honk Kong) was withdrawn in September 2008, due to the global financial meltdown. It's now a 861 million share offering, expected to garner $3.3 billion. How much will end up in Carlyle's hands? China Pacific's stock is up 144% year to date on the Shanghai exchange.

Carlyle wants to cash in on public infrastructure, health care and education. If these sectors provide another 11 bagger, Carlyle will be most happy. Is that how you want your road, water, sewer, health care and education dollars spent? They'll gladly take it. Paying taxes on their gargantuan profits is another matter.