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Carlyle Group Raises $2.8B in Largest Japan-Focused Buyout Fund

HONG KONG, May 21 (Reuters) - U.S. investment giant Carlyle group said on Tuesday it had raised 430 billion yen ($2.8 billion) for its fifth Japan buyout fund, its largest investment vehicle for Japan.

Strong demand and backing from domestic and global investors helped it raise nearly 70% more than its previous fund, Carlyle said in a statement.

The completion of Carlyle's Japan fund signifies increased interest in Japan from global investors, as a cheap yen, buoyant public market and policy drives to improve corporate governance make stocks and assets in Japan more attractive.

Japan's Nikkei share average logged the biggest rise ever on an absolute basis for the year ended March 29 after hitting record levels since February. It's up 16% this year.

Private equity-backed mergers and acquisitions in Japan totalled a record $35.5 billion in 2023, and had risen steadily in number in the preceding decade, LSEG data showed.

Carlyle's Japan buyout platform has invested more than 450 billion yen across about 40 private equity investments since 2000, the statement said.

The firm raised 258 billion yen ($2.3 billion) for its fourth buyout fund in 2020. It has 12 investments to date, the statement said.

That fund delivered a 28% net internal rate of return as of end-March, one of its best performing vehicles, Carlyle's first quarter earnings report showed.

Carlyle on Monday launched a tender offer for fast food operator KFC Holdings Japan in a deal worth 135 billion yen ($863 million).

The firm is selling Japanese cosmetics supplier Tokiwa Corp in a deal that could value the company at $800 million, Reuters reported in March.

Its Japanese portfolio also includes advertising firm Kanamel, beer brand Orion Breweries and Rigaku Group, which manufactures X-ray and thermal analysis and non-destructive testing instruments, the firm's website shows.

The firm said it would continue its strategy of investing primarily in upper middle-market opportunities in Japan across technology, media and telecom, consumer, retail and healthcare, and general industries, focusing on succession transactions, carve-outs, and strategic take-privates.

Reporting by Kane Wu; Editing by Kirsten Donovan and Bernadette Baum

Source: Reuters

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