The Carlyle Group Invests US$50 Million in Beijing’s Hao Yue Education Group; Supports Government Initiative to Provide New Capital for Chinese Enterprises

Hong Kong – Global private equity firm The Carlyle Group today announced its US$50 million investment in Hao Yue Education Group, one of China’s most prominent private higher-education service providers.

Signed in the presence of Mr. Gou Zhongwen, Vice Mayor of the Beijing Municipal Government during the 12th Beijing Hong Kong Economic Cooperation Symposium, Carlyle’s investment is funded by the Carlyle Asia Growth Partners Group (CAGP) and will support Hao Yue’s plan to increase student enrollment in the next three years through campus expansion and acquisitions of other private vocational schools. The investment will also support the launch of short-term training programs.

Hao Yue was founded in 1997 by Mr. Zhou Jiting and his team. Since then, its flagship school has grown to more than 30,000 students with two campuses in Beijing and more than 200 hectares of campus area. It is now one of China’s largest private universities based on student enrollment, campus area and registered capital. There are more than 1,500 full time teachers among the nearly 30 secondary colleges and schools under the school, offering more than 130 majors.

“This marks CAGP’s second investment in China’s education sector. We are attracted to both the resilient nature of the sector, which has the proven potential to grow even in a challenging economic climate, and to Hao Yue’s strong management team, who are fully dedicated to developing the university. During the last few years, Hao Yue has invested more than RMB 1 billion (or US$140 million) in campus and curriculum development, student enrollment and career support. We are confident that our experience in the education sector globally and our international network will provide the world-class expertise and resources required to support the growth of Hao Yue and its students,” says Wayne Tsou, Managing Director and Head of CAGP.

“Despite the global market turmoil, CAGP continues to create value for our portfolio companies by supporting them with equity capital for their long-term funding needs and broadening their market leadership potential through our sector expertise and worldwide network. CAGP remains committed to forging durable partnerships in China and has invested US$200 million of equity capital in existing portfolio companies and three new companies in 2008 thus far,” Mr. Tsou continued.

The business model of Hao Yue’s university puts career training and development at the core of its service proposition, offering a career-oriented curriculum that equips its students with strong practical skills and puts them in touch with a wide employer network. It emphasizes internships for students to gain proper pre-employment training. During the last few years, Hao Yue’s university graduates have enjoyed a high employment rate of approximately 80%.

“Our partnership with The Carlyle Group represents the next big step in expanding our business. We now have a stable, long-term source of capital that will allow us to fully realize our firm’s potential. We will also be able to draw upon Carlyle’s deep management expertise and global network,” says Mr. Zhou Jiting, Chairman of Hao Yue.

China’s education sector is growing rapidly, driven by robust economic growth, a deep-rooted social and cultural tradition that emphasizes education, favorable demographic trends and increasing investment from both government and private sectors. Private universities are playing an increasingly important role to supplement public education. The total number of private higher education students has grown quickly to 11% of the total students in 2005 from 4.3% in 2003. HaoYue’s experienced management team and proven business model have enabled it to capitalize effectively on the increasing opportunities in the education sector.

The deal was showcased by the Beijing Municipal Government as testament to Beijing’s continued attractiveness as an investment destination.

The Hao Yue transaction was one of the investment contracts signed during the 12th Beijing Hong Kong Economic Cooperation Symposium. This symposium, held on November 26-27 in Hong Kong, was co-hosted by the Beijing Municipal Government and Hong Kong Trade Development Council, with the objective of promoting economic and trade cooperation and investment between the two cities. In the past six years, this joint government effort facilitated a total of 285 cooperative agreements, with an aggregate investment of US$12.98 billion, effectively promoting mutual economic and investment activities.

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About Hao Yue Education Group
The Hao Yue Education Group was founded in 1997. Its flagship school is approved by the Beijing Municipal Government as a full-time, integrated private vocational university which is able to independently grant government-accredited academic certifications. The school has grown to more than 30,000 students with two campuses in Beijing and more than 200 hectares of campus area. There are more than 1,500 full time teachers and 2,000 part time teachers, and nearly 30 secondary colleges and schools offering more than 130 majors. The school has an objective of “developing talent to give back to the country”, and a service proposition focused on quality education for the students and operating the school with management excellence. It is dedicated to providing a career-oriented curriculum that equips students with strong practical skills. For more information, please visit www.5aaa.com.

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