Carlyle Group Inc. put a hold on closing a new pan-Asian buyout as the demand for Japan-focused vehicles has syphoned off investor interest, as per the individuals aware of this matter The Washington-based firm has asked for an extension on closing its 6th regional buyout fund. Since its launch two years ago, it has received more than $3 billion, which is below its estimated target of $8.5 billion target.
Among global investors, fundraising is becoming a heightened concern, and supporting investors for overpaying assets and exit opportunities is resulting in more rigorous due diligence. However, a Hong Kong-based spokesperson has declined to comment on the issue. Investors promise access to Japan deal flow, including a $610 million acquisition for KFC Holdings Japan.
Rising geopolitical concerns, worsening exits, capital distribution, and significant losses from China’s investment have prompted investors to reduce the allocation of pan-Asia funds and focus more on home markets. The US firm told investors that exposure to China in its sixth Asia fund will be cut down to 20% over the next fund cycle.
Investors in New Asia will be promised access to the Japan deal flows, including the recent acquisition. Carlyle’s disposal of its entire stake in McDonald’s China operation, assessing for 6.7 times return, is one of the best exits from China and helps to mitigate the concerns for distribution.
