The the world's second largest private equity firm, Carlyle Group, with more than $85.5 billion under management, is planning to raise $1 billion for its second Asia real estate fund, in order to take advantage of falling prices in the Asian property market.
By raising $1 billion, Carlyle wants to tap into property deals in two of the Asian economic giant countries, Japan and China.
Quoting source Reuters reported that the fund, to be called 'Carlyle Asia Real Estate Partners II', has already received commitments of over $500 million from global institutional investors.
The Washington DC-based Carlyle had said last week that it may participate in the US government's $1-trillion proposed public-private partnership to absorb the toxic assets from banks, which would once again start the flow of money in the credit market.
On 3 March, Carlyle completed raising its second mezzanine fund of $553 million followed by raising $500 million for its first Middle East and North Africa (MENA) fund on 9 March, which it plans to invest primarily in healthy, growing companies in various sectors, including energy, financial services, healthcare, industrial, infrastructure, technology and transportation in the region.
Last week, New York state Attorney General Andrew Cuomo said that The Carlyle Group was one of the five investment companies to have paid more than $13 million as kickbacks ''in sham placement fees" to fund raisers for the New York state's pension fund.
Due to the global economic credit crunch, private-equity firms made $204 billion of deals in 2008, a 70 per cent decline from the same period a year earlier, but in November, the Carlyle Group raised $14 billion of its $15-billion fund, announced in 2007.
Industry experts had opined at that time that it was remarkable that a PE fund has been able to raise such a huge amount in the current economically stressed market conditions, when the amount raised has fallen to its lowest point since the first quarter of 2005; so far 117 equity funds have raised $82.3 billion in the third quarter of 2008.
In a cost cutting measure, the firm laid off 100 employees and shut down its Central European and Asian leveraged-finance units in November. (See: Carlyle shuts offices, raises $14 billion)