Monday, January 11, 2010

Carlyle Group Yuans

The Beijing Municipal Bureau of Financial Work approved the Carlyle Group's start up of yuan denominated fund. Reuter's reported:

U.S. private equity giant the Carlyle Group [CYL.UL] has signed a memorandum of understanding (MOU) with China to launch a yuan-denominated fund in Beijing.

Global private equity firms can raise yuan funds from super-rich Chinese individuals, Chinese pension funds or domestic enterprises, but these funds are off limits to non-Chinese investors because of the country's strict foreign exchange controls.

How do Carlyle executives put skin in the game? David Rubenstein, William Conway and Daniel D'Aniello don't sound the least bit Chinese. Carlyle's press release provides a clue:

The Carlyle Asia Partners RMB Fund will be entitled to preferential treatment from the Beijing Municipal Government, in accordance with its development policies for the city’s finance and equity investment industry.

Can Carlyle get their money losing clients into Chinese investments? David Rubenstein promised unhappy investors that Carlyle would help make up losses with discounted fees.

Big money influence peddling goes global. Private equity underwriters (PEU's) are the answer to all our crises, banking, pension, infrastructure, and health care.