Carlyle looks south-of-the-border for deals

Posted Dec 3rd 2009 12:40PM by Tom Taulli
Filed under: Brazil, Private Equity

Traditionally, the role of private equity is to buy mature companies and find ways to improve the operations. The result is often a tidy profit.

But over the past couple years, the strategy has been undergoing some changes. Look at the Carlyle Group. Recently, the firm invested $60 million in three growth companies in China. In fact, these deals came only four months after Carlyle raised its Asia Growth Partners IV fund.

However, Asia is not the only place that Carlyle is putting money to work. The firm also see lots of opportunities in South America, especially Brazil. Actually, Carlyle expects to announce several deals in the region soon.

The largest economy in Latin America, Brazil continues to grow at a nice pace. According to the David Rubinstein, the co-founder of Carlyle, the country will be one of the leaders that comes out of the global recession. He thinks Brazil will grow 5% next year and will become the world's fifth largest economy within ten years. And, to capitalize on things, Carlyle is in talks with Banco do Brasil to raise a new fund.

Clearly, there are many signs that private equity is making a comeback. But increasingly, the action is in emerging markets and the focus is on providing capital for growth, not restructuring.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: Banco do Brasil, Brazil, Carlyle, David Rubinstein, inthenews, private equity