Carlyle CEO Kewsong Lee says firm is committed to China despite “bumps”

REUTERS/Brendan McDermid/File Photo

Carlyle Group Inc Chief Executive Kewsong Lee said on Wednesday that the U.S. private equity firm will remain a long-term investor in China despite “bumps” that have unnerved some investors.

Beijing authorities have rolled out restrictions in the last few weeks on companies, including those in the technology sector, to control big data and break down monopolistic practices. They announced an investigation into Didi Global Inc and ordered the removal of its apps for download in China days after the ride-sharing giant’s initial public offering in New York.

The crackdown has sparked investor concerns over policy changes and wiped off hundreds of billions of dollars in market value from some of China’s largest companies including Alibaba Group Holding Limited and Tencent Holdings Ltd. Investor concerns this week that property developer China Evergrande could default on its massive debt pile have added to the market jitters.

“We at Carlyle are very strategically committed to that region and we have seen these types of bumps in the middle of the night in that part of the world,” Lee said in an interview at a Reuters Newsmaker event in New York when asked about the impact of China’s restrictions on companies.

Lee said that sophisticated investors such as sovereign wealth funds and pension plans remain underinvested in China, the world’s second-largest economy, and that there were still opportunities available to investment firms with local expertise such as Carlyle that can navigate the country’s complex regulatory environment.

Carlyle, which had $276 billion in assets under management as of the end of June, continues to be focused on the rise of consumers in China, its under-penetrated healthcare sector, and Chinese technology firms, Lee said.

On the drive toward sustainability and environmental, social and corporate governance (ESG), Lee said that in the first half of this year nearly 60% of the board directors who joined companies that have been controlled by Carlyle for at least two years were from diverse backgrounds, putting it ahead of its 30% target.

He also said that even companies whose business contributes to climate change can be good ESG investments if their track record improves sufficiently.

“I think people have to also understand that you have to invest in traditional companies to provide capital to enable them to transition,” he said.

Lee has been rolling out changes to improve Carlyle‘s fee-related earnings and boost its share price, which has doubled in the last 12 months. He said the firm’s strategic plan was paying off, with the pace of fundraising and investing rapidly accelerating and performance fees hitting a record.

Reuters

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.