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Blackstone nails some commitments to China fund

(Reuters) – Blackstone Group LP(BX.N) has three commitments so far to the yuan-denominated fund it is raising in China, it said on Thursday.

Blackstone announced plans in August to launch a 5-billion-yuan ($732 million) fund to invest primarily in the city of Shanghai. The size of the fund is limited under Chinese law to that size, Blackstone has said.

“It is still early,” Blackstone’s Chief Operating Officer Tony James said on a conference call to discuss the firm’s earnings. “We have, I think, three commitments there now, and we’re still in the market,” he said, adding that he couldn’t predict its ultimate size.

Private equity firms have been increasing their reach in the country.

Rival buyout firm Carlyle Group [CYL.UL] said earlier this week it will team up with China’s largest non-state-owned conglomerate, Fosun Group, to launch a $100 million yuan-denominated private equity fund, part of a global strategic alliance to share resources. [nTOE61N085]

One investor for Blackstone’s RMB fund is a major local developer focusing on Shanghai’s Lujiazui financial district in Pudong, the would-be Wall Street in China, said a source briefed on Blackstone’s fund-raising plan in Shanghai. He declined to be identified as he was not authorized to speak to the media.

Shanghai city’s government agreed to finance at least 20 percent of Blackstone’s RMB fund capital, the source said.

Blackstone did not comment on the conference call on who made the commitments. (Editing by Gerald E. McCormick)