By Sonja Cheung
BEIJING--Goldman Sachs Asset Management aims to raise $200
million from its clients for a pair of funds that will funnel
capital into the Carlyle Group's fourth Asian vehicle, which is
targeting $3.5 billion, according to marketing documents.
The proposed feeder funds offer investors access to Carlyle Asia
Partners IV LP for a $1 million minimum commitment, as opposed to a
$5 million minimum commitment for investors backing the Carlyle
fund directly, according to the documents.
Both of the feeder funds and Carlyle Asia Partners IV LP were
expected to complete closings in January, according to the
documents. Filings with the Securities and Exchange Commission
indicate the two feeder funds had attracted some $145 million in
commitments as of March.
Financial institutions often set up "feeder funds" to invest in
a single fund, in this case Carlyle Asia Partners IV, as a way to
diversify portfolios for smaller investors, typically high net
worth individuals. In this case, Goldman Sachs Group Inc.'s (GS)
asset management unit will receive a fee from Carlyle based on a
percentage of how much capital is committed to Carlyle Asia
Partners IV, in addition to other fees depending on whatever other
services the asset manager provides, according to the
documents.
Washington, D.C.-based Carlyle is still in the process of
raising new capital and has so far secured more than $1 billion,
according to recent media reports. A Carlyle representative
declined to comment on the firm's fund-raising. A representative
from Goldman Sachs Asset Management also declined to comment.
The target for Carlyle Asia Partners IV far outstrips the firm's
previous Asian funds, including the $2.55 billion Carlyle Asia
Partners III LP, the $1.8 billion Carlyle Asia Partners II LP and
Carlyle's $750 million maiden Asia fund. Carlyle joins a small
handful of large firms that have pitched large Asia focused funds
in the past year. TPG Capital is still raising a $4 billion sixth
pan-Asian fund, while New York firm Kohlberg Kravis Roberts &
Co. has secured $6 billion for its newest Asian fund.
Carlyle has achieved a 3.6 times return on invested capital from
its first fund, according to the marketing documents, and has
invested more than 85% of the third fund. It has exited portfolio
companies, such as the KorAm Bank, via a trade sale in 2004, while
recent activity includes taking part in a consortium that includes
FountainVest Partners in a $3.7 billion buyout of Focus Media.
Carlyle will commit $100 million and more than 3% of total
commitments to its new vehicle. Although investors in GSAM's feeder
funds won't be charged management fees by the asset manager, the
term sheet's small print stipulates they will "indirectly" bear
Carlyle's management and carried interest fees. Fund IV's
management fees are in the range of 1.3% to 1.5% on committed
capital. The fund also has an 8% preferred return compounded
annually.
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Write to Sonja Cheung at sonja.cheung@dowjones.com
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