Thursday, December 2, 2010

Third Yuan Fund for Carlyle Group?

WSJ reported:

Carlyle Group LLC is exploring a possible new private-equity fund denominated in Chinese yuan targeting investments in western China, a person familiar with the situation said Thursday.

The U.S. private-equity firm had preliminary discussions with the government of Chongqing municipality on jointly launching the fund, the person said, declining to be named.

The person didn't comment on the size of the fund, but 21st Century Herald reported Thursday, without citing sources, that the fund could be as large as CNY5 billion ($750 million). 
Carlyle already has two yuan funds, one in Shanghai and another in Beijing.  As for what Carlyle brings to the table, consider co-founder David Rubenstein's words.

“The Chinese government also recognizes how we can help local companies acquire western competitors and technologies and that’s something they’re very interested in.  GE is not teaching people in China to buy companies in the west like we are.”
Also, Carlyle "China-sized" automobile parts maker UCI from 2005 to 2010.  UCI went from no Chinese subsidiaries to fourteen, while overall employment fell by 1,550 workers.

The Carlyle Group loves the certainty of central planning, growing markets and cheap labor, as it pursues 30% annual returns.  Lip licking greed knows no bounds.

Update 5-6-11:  China slowly opens the door for PEU's.

Update 5-31-11:  China published rules for PEU investing