Carlyle to return next year with latest Asia mega-fund

The alternatives firm could seek between $8bn and $10bn for Carlyle Asia Partners VI, PEI understands.

Carlyle Group is expected to launch its sixth Asia flagship fund early in 2022, Private Equity International understands.

The Washington DC-headquartered firm could seek between $8 billion and $10 billion for Carlyle Asia Partners VI, according to a source with knowledge of the matter.

CAP VI is expected to deploy a larger proportion of its capital in buyouts than minority deals, the source added. Its predecessors were more skewed towards the latter.

Carlyle declined to comment on fundraising.

Only two Asia-focused private equity funds have closed north of the $10 billion mark to date, according to PEI data. KKR set the Asia-Pacific fundraising record this year with its $15 billion KKR Asian Fund IV. Hong Kong-headquartered Hillhouse Capital held the previous record with its 2018-vintage Hillhouse Capital Fund IV, which raised $10.6 billion, and the firm is reportedly seeking $13 billion for a successor fund.

Carlyle raised $6.55 billion for its 2017-vintage Asia Partners V, which included a $250 million commitment from the California Public Employees’ Retirement System, $100 million from New York State Teachers’ Retirement System and $100 million from the UK’s West Midlands Pension Fund, according to PEI data.

That fund had delivered a 1.4x multiple of invested capital and 24 percent net internal rate of return across total investments as of 30 September, according to Carlyle’s Q3 earnings statement. Its $3.88 billion predecessor, the 2013-vintage Carlyle Asia Partners IV, was at 2x and 13 percent.

Carlyle named Amit Jain, a former senior managing director and 10-year veteran at Blackstone, as its co-head of India private equity this month. The firm has invested and committed more than $5.5 billion in India across 44 investments to date and signed several hefty deals in the country last year, including a 74 percent stake in healthcare company SeQuent Scientific for a reported 15.87 billion rupees ($215 million; €180 million).

Asia-Pacific accounts for 8 percent of Carlyle’s $293 billion of total assets under management across private equity, private credit and investment solutions, per the firm’s website.

Regional funds have been no exception to a global flight to familiarity during the pandemic, with travel bans, geopolitical tensions and regulatory risk in China making the fundraising process a slog for less established players. Asia-Pacific funds raised $45 billion in the first three-quarters of 2021, according to PEI data. They collected $55.7 billion last year, down from $79 billion in 2019 and a record $86.8 billion in 2018.

“It’s easier to go with people you know or people whose names you recognise, and of course with the uncertainty of covid, geopolitics and everything else at the moment, it’s sort of understandable,” Gavin Anderson, a Hong Kong-based partner at Debevoise & Plimpton, told PEI in August.

“People may not want to be a hero in this particular environment at this particular moment in Asia. In terms of how that then flows through to fundraising, there are big funds with very strong track records that are being raised pretty quickly, and they have a lot of leverage because there is capital out there and it has to go somewhere.”