Carlyle Group is set to raise $950 million for investments in South America as the U.S. buyout firm assembles its first private-equity fund dedicated to the region, a person with direct knowledge of the plan said.
Carlyle has lined up about $730 million for the fund from institutional investors, according to the person, who wasn't authorized to comment publicly.
The state-controlled lender Banco do Brasil SA is committing roughly $220 million to a related partnership that would target investments in Brazil, where Carlyle's nine-member South America team is based, according to two people who are familiar with the venture.
Carlyle and the bank formed the fund in July, the Folha de S. Paulo newspaper reported at the time. Chris Ullman, a spokesman for Carlyle, of Washington, the second-largest U.S. buyout firm by assets under management, declined to comment. An official at Banco do Brasil declined to comment on Carlyle's fund raising.
Managers in the U.S. are turning to emerging markets to make up for lackluster dealmaking and the worst fund-raising environment since 2003 at home. The firms are capitalizing on growing populations, increasing disposable income for consumer products and the need for infrastructure development.
Carlyle and Credicorp Ltd., Peru's largest financial services company, have formed a joint venture to scout for investments in that country's mining, infrastructure, energy and consumer industries. Blackstone Group LP, the world's largest private-equity manager, last year bought a 40% stake in Patria, a Brazilian private-equity firm.
Brazil has recorded the largest value and number of mergers and acquisitions in at least 12 years, driven by economic growth of 7.5%, according to data compiled by Bloomberg News. Latin America's biggest economy had 482 deals in 2010, valued at $146.4 billion.
Private-equity firms raised $8.1 billion for investment across Latin America in 2010, according to the Latin American Venture Capital Association. The amount was more than double that raised in 2009, according to the association.
Carlyle, which began marketing its South America fund in 2009, had originally set a target of raising $500 million, according to the person familiar with its plans. Led by Fernando Borges, the Brazil-based team has already committed or deployed about $950 million in three deals, in part by drawing on other Carlyle pools of capital, the person said.
Carlyle hired Borges in early 2008 to build the Brazil office that now includes senior dealmakers Juan Carlos Felix, a former McKinsey & Co. partner, and Fernando Pinto, a former investment officer at Capital International Research Inc. and investment banker at Goldman Sachs Group Inc.
The team's first investment was in CVC Brasil Operadora & Agencia de Viagens SA, the largest tour operator in Latin America, in December 2009. A deal for a controlling stake in the Brazilian health insurance brokerage Grupo Qualicorp valued at $1.2 billion followed last July.
