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Carlyle launches $125M Peru fund

13 June 2012

(Private Equity International) June 13, 2012 – The Carlyle Group has launched an investment fund targeting investments in Peru, a country that has been attracting attention for its solid growth and relative under-penetration by private equity managers.

Carlyle is targeting $125 million for the vehicle, called Carlyle Peru Fund, according documents filed with the US Securities and Exchange Commission.

Carlyle declined to comment.

The firm revealed earlier this year it was establishing a presence in Peru after forming a joint venture with Peruvian financial services company Credicorp. The publicly listed firm planned to make growth and buyout investments in various sectors, including healthcare, education and consumer/retail. The target sectors are typical focuses of private equity managers investing in emerging markets, as they generally grow alongside expanding middle classes.

At the time the joint venture was announced, Carlyle also said it planned to open an office in Lima, Peru this year. It’s unclear whether the joint venture plans have changed with the launching of the Peru fund.

While the filing of fundraising documents with the SEC implies Carlyle will target institutional investors in the US for commitments, the firm also is understood to be marketing to local Peruvian pensions.

Pension systems in Peru are allowed to invest up to 3 percent of their assets in private equity.

While Brazil has been the destination of choice for private equity managers in the past few years, countries outside of Brazil, like Colombia, Mexico, Chile and Peru, have increasingly gained attention as their economies have grown and their middle classes have expanded.

Private equity has become an important asset class for Peruvian pension systems as they “seek to meet the diversification criterion and, at the same time, generate returns which are in line with the investment horizon of our funds”, Jose Roca, chief investment officer for Prima AFP, the largest pension fund manager in Peru, told the Latin American Private Equity and Venture Capital Association in an interview in March.

“The asset class has yet to develop further as only a few players have emerged with strong credentials and ability to execute good deals, and we have seen very few exits occur,” Roca said.

Carlyle established a local presence in Latin America in 2008, opening a Sao Paulo office. Last year, the firm closed two Latin American funds totaling $1 billion – the Carlyle South America Buyout Fund, and an investment vehicle raised in partnership with Banco de Brasil. The South America fund’s main focus is Brazil, though it is considered a pan-regional fund.

Carlyle has traditionally created separate funds for different strategies, unlike other firms that invest in various strategies out of large, general funds. The firm also is in the market raising a fund for investments in sub-Saharan Africa, targeting $500 million.