Carlyle in talks to set up Shanghai-based RMB fund

The fund, which will reportedly raise several billion in RMB, follows the US firm’s establishment of a smaller growth capital RMB fund earlier this year.

The Carlyle Group is in talks to set up an RMB fund, an industry source has confirmed.

The firm will raise several billion in the local currency, according to The Wall Street Journal, which noted Kohlberg Kravis Roberts is mulling a similar move. 

Carlyle declined to comment. KKR did not respond to requests for comment at press time.

The two would join several other international firms — including The Blackstone Group, Macquarie Group and First Eastern Investment — that have recently moved to set up RMB funds under a pilot policy Shanghai introduced in June, enabling foreign private equity firms to establish Chinese subsidiaries. 

In May 2008, Carlyle signed a memorandum of understanding with the Shandong Provincal Government. The MOU said that Carlyle would “dedicate resources, capital and expertise to the region to promote and develop sustainable, long-term commercial enterprises” in return for proactive goverment reccomendations on investment opportunities, according to a statement at the time. 

Earlier this year, Carlyle set up a smaller RMB fund to make growth capital investments, according to the source. No such fund is listed on the firm's website, however.

In June, Carlyle closed Carlyle Asia Growth Partners IV on $1.04 billion. The firm is presently raising its third Asia-focused buyout fund, which initially went to market with a reported target of $4 billion.