Carlyle Group’s Asia Fund Reaches $450 Million

The Carlyle Group in March held a $450 million (euro 420 million) first close on Carlyle Asia Partners LP.

Fund raising for the vehicle, which was launched last summer with a

$1 billion target, has been slower than Carlyle anticipated. The group originally scheduled the final close for December 1998 but now expects to close the fund this summer.

Marketing for the fund has focused principally on investors based in the US, Europe and the Middle East rather than on Asian institutions. No details of investors at the first close have yet been made public.

Operating out of offices in Hong Kong and Singapore, Carlyle Asia Partners will focus on the telecommunications, information technology, financial services and aviation sectors in South East Asia and China. The fund may invest on a stand-along basis but is also able to take minority positions alongside local or international strategic partners.

The Carlyle Group predicts that the vehicle should generate IRRs of between 25% and 30%.

Carlyle was in the vanguard of the US buyout houses’ push into Europe, closing its $1.1 billion Carlyle European Capital Partners fund last spring. Although fund raising for the Asian vehicle has so far proved tougher, Carlyle vice president Jim Griffin described the effort as “successful” and suggested that firms now raising buyout funds for Asia are ahead of the trend.

In a year’s time, Jim Griffin said, investors will be looking to pour money into Asian funds in the same way that they are currently deploying increasing amounts for buyouts in Europe.

The Carlyle Asia Partners team is headed by Steven Orlins who joined Carlyle in late 1997 to head the firm’s Asian effort. He was previously a director of Lehman Brothers Asia.