Investment Updates News
- Carlyle focuses on private companies
Date: 13-Dec-2006 Sources: (Shenzhen Daily)
U.S. buyout firm Carlyle Group is keen to invest in more privately owned companies in China in the next three to five years to reap more from that segment of the fast-growing economy.
The Washington-based firm raised a US$800 million Asia-wide fund at the end of last year, targeting investments mainly in three countries in the region: South Korea, India and China, said Sean He, a Carlyle managing director in Asia Pacific.
Carlyle has so far invested in total US$77.5 million of the fund in three separate projects in China, including a local flooring firm, an outdoor advertising company and a credit service provider, said He, who runs the fund.
All three firms are privately-held Chinese companies, he told a small group of reporters on the sidelines of an investment forum in Shanghai last week.
'We are very interested in private companies in China, which are very different from State-owned companies, from their business scope to management level,'He said.
'When we invest in private firms in China, we don't ask for management control, as many of them know the businesses better than us,'said He, who manages a total of US$1 billion in funds in the region for Carlyle.
'What we want to do are mainly two things - to help them to find outstanding managers and to let them expand their business to overseas markets such as the United States, where we have many sources and connections,'he added.
But he also noted that Carlyle will appoint at least one director to the board of any Chinese company that it invests in to ensure a measure of influence.
He cited Chinese outdoor advertising agent Time Share Advertising & Communication Co. Late last month, Carlyle agreed to invest US$20 million in the firm, part of its US$800 million Asia-wide fund.
Carlyle is now helping Time Share to attract new advertising clients from abroad, including U.S firms Microsoft Corp. and Intel Corp., He said.
The global buyout firm is also assisting Shanghai Anxin Flooring Co., in which it invested US$27.5 million in May, to sell its branded flooring products to the U.S. market, He said.
About 60-70 percent of the Asia-wide fund could be invested in China and India, and Carlyle is especially interested in growth-stage small and medium-sized private companies in China, said He.
'Our Washington headquarters are very positive about our investments in China at present and we all believe the market still has huge potential for further investment,'said He.
In October, Carlyle agreed to cut the size of its proposed stake in China's top machinery maker Xugong to 50 percent from an originally planned 85 percent, amid rising domestic concern over the prospect that State assets might be sold off cheaply or jeopardise State security.
Carlyle has been awaiting regulatory approval for the Xugong deal for more than a year, which is not given yet.
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