Carlyle to critics: "We can spend as fast as anyone!"

Critics (clients?) of Carlyle's uncertain efforts in Asia ex-Japan were informed by Carlyle that the firm had, contrary to what some may have thought, been ENORMOUSLY SUCCESSFUL at spending money.

Carlyle defends its track record in Asia (FT)

Carlyle Group, which has suffered high-profile setbacks in China, has issued a robust defence of its track record and predicted that private equity investment into Asia will flourish in spite of the global credit crunch.

The US private equity fund struggled for 18 months to win approval for a sizeable investment in Xugong, China’s leading construction machinery maker, amid a nationalist backlash.

This year it failed to secure approval for an 8 per cent stake in Chongqing Commercial Bank, a provincial lender.

However, XD Yang, Carlyle’s most senior executive in Asia, told the Financial Times that the fund had closed 14 deals, with a total value of $800m, in China over the past year. All the investments were for minority stakes in companies in sectors that included financial services, media and manufacturing. Carlyle has not previously confirmed its deal activity in the country.

Mr Yang said investors had to accept that an opaque regulatory process was a part of business in China. He said that in some sectors in China the approvals process was not clear or established. “This applies not just to Carlyle but also to other funds and multinationals. We are continuing to make lots of investments.”

Carlyle was a pioneer of private equity in Asia, and has $6.3bn dedicated to investments in the region.

Its first Asia buy-out fund, which closed in 1999, has delivered a gross internal rate of return of 26 per cent against a comparable industry average of 15 per cent, according to Carlyle. Mr Yang disclosed that Carlyle’s second buy-out fund for (non- Japan) Asia, which closed in July 2006 with $1.8bn, had already committed 60 per cent of its funds to new investments.

If I was a Carlyle client, the fact they have committed 60% of a 1.8 billion buyout fund into primarily MINORITY stakes in ONE YEAR would make me feel much better.