Shanghai Approves Carlyle and Fosun Joint RMB Fund; First Business License Granted to Foreign-Funded Equity Investment Partnership Enterprise

Shanghai - Shanghai Administration of Industry and Commerce (SHAIC) today granted a business license to Fosun-Carlyle (Shanghai) Equity Investment Fund, the jointly-operated Renminbi (RMB) fund announced only a week ago by the global private equity firm The Carlyle Group and Fosun Group, the largest privately-owned investment conglomerate in China. This completes the registration process of the fund and allows it to immediately deploy capital.

This is the first Equity Investment Partnership Enterprise license issued in China; the relevant regulations became effective on March 1st. The Administration Measures on Establishment of Partnership Enterprises in China by Foreign Enterprises or Individuals was promulgated by the State Council and is aimed at promoting broader economic cooperation and technological exchange.

“Fosun-Carlyle (Shanghai) Equity Investment Fund is the first foreign-funded equity investment partnership enterprise in China,” said Chen Xuejun, Deputy Director General of SHAIC. “The establishment of the fund has great significance and will instill new blood to the construction of Shanghai as an international financial center. It will also further enhance the development of China’s local PE industry.”

Wayne Tsou, Managing Director and Head of Carlyle Asia Growth Partners, said, “We greatly appreciate the speedy approval by SHAIC. With strong support from SHAIC and related government departments, I am confident that this joint fund, backed by global and local resources of both groups, will be able to tap the full growth potential of China while supporting the development of local companies and economy.”

Ding Guoqi, Senior Vice President and Chief Financial Officer of Fosun Group, said, “We are honored and proud that Fosun-Carlyle (Shanghai) Equity Investment Fund was the first of its kind in China. It’s a milestone in the country’s PE industry. We will try our best to become a role model of Chinese-foreign cooperation in the financial industry and contribute to Shanghai’s efforts in building an international financial center.”

Carlyle and Fosun announced a strategic relationship on February 24, 2010, including a jointly sponsored RMB fund. With initial investment of US$100 million from Carlyle’s Asia Growth Fund and Fosun, the co-branded RMB fund will be able to immediately invest in high growth companies in China. Carlyle and Fosun will also seek to raise capital from local Chinese investors, identify co-investment opportunities around the world that have a business nexus to China and share each other’s best practices and resources to better tap the growth potential presented by China.

Fosun already manages a number of funds for Chinese investors, and Carlyle signed an MOU in January with the Beijing Municipal Bureau of Financial Work on the formation of an RMB-denominated fund in Beijing. That fund, which will invest alongside Carlyle Asia Partners, will focus on larger investments.

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