Strat Partners buys into Carlyle Asia fund

Carlyle Asia Partners III raised $2.5bn and currently owns Chinese consumer appliance manufacturer Haier Electronics.

The Blackstone Group’s Strategic Partners has acquired a stake in Carlyle Asia Partners III (CAP III), UK regulatory filings disclosed.

CAP III is a 2008-vintage fund that closed on about $2.55 billion, according to PEI’s Research and Analytics division. Limited partners in the fund include CalPERS and Hong Kong investment firm CDIB Capital International Corporation.

Current investments include Chinese consumer appliance manufacturer Haier Electronics, which the firm acquired in 2011. CAP III was also used to invest in Chinese budget hotel chain 7 Days Group. The firm invested alongside Sequoia Capital and Actis in a deal valued at $688 million in 2013, according to media reports.

CAP III also bought a stake in pediatric milk producer Yashili International in 2009. The firm sold its interest to China Mengniu Dairy for HK$3 billion ($390 million; €360 million) in 2013.

The fund was generating a 1.5x multiple on invested capital and a 10 percent net internal rate of return as of 31 December 2014, according to The Carlyle Group’s fourth quarter earnings report.

Carlyle is currently investing its subsequent Asia buyout fund. CAP IV is a 2012-vintage fund that raised $3.8 billion, PEI data disclosed.

Carlyle declined to comment.

Strategic Partners acquired the fund interest from Kuwait manufacturing and investment conglomerate National Industries Group (NIG).

It is unclear why NIG sold its stake in CAP III, however media reports disclose the company has been in litigation against Carlyle since 2009. NIG initially sued Carlyle for about $25 million in failed mortgage-backed securities that it purchased from the private equity firm. The company claimed Carlyle’s lack of a license to sell securities in Kuwait voided the investment contract.

NIG declined to comment.

Strategic Partners funded the transaction using its most recent secondaries fund, which closed on $4.4 billion last October.

The firm declined to comment on the transaction, but a source familiar with the matter said Strategic Partners is expanding its network to access international sellers particularly in Asia, Europe, the Middle East and South America.