MUMBAI: Carlyle Group plans to invest at least around $1.2-1.3 billion in India from its fresh $6.55 billion Asia buyout fund as the Washington-headquartered alternate asset manager looks to tap larger controlling deals in the Asia’s fastest growing economy.
Carlyle on Thursday closed its fifth Asia fund at $6.55 billion, exceeding its target of $5 billion and 65% more than its previous fund.
“India is a strategic market for us. From our last fund, our deployment has been around 20% of the total fund in India. This time, the size is bigger and India has emerged as one of the most important markets for us. So, the allocation could increase,” said Neeraj Bhardwaj, managing director at Carlyle in India.
Carlyle’s historic allocation to India from its Asia funds was about 5-7%. Carlyle has invested $1.9 billion through 35 transactions in India across all Carlyle funds. Its current investments in India include SBI Cards, PNB Housing Finance, Metropolis Healthcare and Delhivery Logistics. In the last 3 years, it had invested $750 million across six transactions. Carlyle is one of the largest private equity investors in the Asia Pacific.
The firm has invested more than $18.5 billion of equity in the region, with $20 billion of assets under management as of March 31, 2018. Carlyle started investing in Asia in 1998 and has since partnered with more than 160 companies through its Asian private equity platform.
“Buyouts could be one of the key opportunities. There are multinational corporations looking to sell parts of their India businesses, while large Indian conglomerates are also looking to sell non-core businesses or non-profitable ventures. This will be one of the key themes that will come to play in India,” said Bhardwaj.
Sector wise, financial services will continue to be the fund’s core focus of investments in India. Healthcare, export-oriented pharma and consumer durable firms are also would be an interesting play, he said.
Carlyle was the first among the global buyout giants to launch Asiaspecific investment vehicles. Other than Carlyle, Blackstone had raised a record $9.4 billion earlier last week for two new funds — the largestever fund dedicated to real estate investments in Asia as well as its first private equity fund for the region.
In June last year, New York-headquartered KKR closed a record $9.3 billion for its dedicated Asia fund, the largest ever raised for a region. Bain Capital is also seeking to raise close to $3 billion for a dedicated Asia fund.
Other firms such as Apollo and Baring also have regional funds.
Last year, 921private equity funds reached a final close, securing a total of $453 billion in investor commitments. This is an alltime fundraising record for the private equity industry, surpassing the previous record of $414 bn that was raised by 1,044 funds in 2007, said Londonbased industry tracker Preqin.