Carlyle in China Pacific partial exit

Carlyle has already recouped its investment in China Pacific through an $860m partial exit from the Chinese insurer and is on track for a 6x return.

Global private equity firm The Carlyle Group has partially exited its five-year-old investment in China Pacific Insurance, a spokeswoman for the firm confirmed to PEI Asia.

The Washington, DC-based firm sold about 215 million China Pacific shares at HK$31.15 (€3; $4) each, reducing its 15.4 percent stake in the company by about a sixth, according to media reports. The spokeswoman declined to give further information.

Shares of China Pacific were last trading at HK$31.9 per share at the time of going to press.

In December 2009, the insurance giant raised $3.1 billion in a Hong Kong initial public offering, giving Carlyle a paper return of roughly 6x its initial investment. Following the listing, Carlyle was subject to a one-year lock-up period, which expired last week.

Carlyle first invested in China Pacific together with American insurance company Prudential Financial at the end of 2005, committing RMB3.3 billion for a combined 25 percent stake in the Group’s life insurance business. At the time, China Pacific was facing bankruptcy and Carlyle and Prudential invested with the intention of turning around the operations of the life insurance arm.

In 2007, before the company listed on Shanghai’s A-Share market, Carlyle upped its investment and converted its holding to a 17.3 percent stake in the parent group. In total, over the two funding tranches, Carlyle has invested around $800 million in China Pacific.

The firm’s interest was diluted due to the new share issuance through the Hong Kong IPO. According to a report in the Financial Times at the time, China’s Hopu Investment Management was the single biggest purchaser of new China Pacific stock, buying $430 million worth of shares.