Carlyle Bags $4 Billion Profit From China Insurance Exit

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Private equity firm Carlyle Group sold its remaining stake in China's No.3 insurer CPIC in a deal valued at $793 million, exiting the business with its largest dollar profit on an investment.

After several stake sales in the past two years, Carlyle will finish with a total profit of more than $4 billion, five times the $800 million it invested in CPIC between 2005 and 2007 for a 17 percent stake, Thomson Reuters calculations show.

By private equity standards, where making two times cash paid and a few hundred million is considered a success, the CPIC exit is an historic deal for Carlyle.

Carlyle confirmed the sale, without disclosing the terms.

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The U.S. group, among the world's biggest private equity companies with more than $157 billion in assets under management, sold 203 million Hong Kong-traded shares of China Pacific Insurance (CPIC) at the top of an indicative range of HK$30 to HK$30.30 per share, a source with direct knowledge of the deal told Reuters.

CPIC shares were down 2.1 percent in early afternoon in Hong Kong, trading above Carlyle's sell down price as the sale removed an overhang on the stock.

Carlyle began selling down its CPIC stake in late 2010, culminating in the current deal.

Strong demand for insurance products in China through the country's rising middle class, coupled with a bull market, has led to a surge in CPIC's share price. The shares have climbed nearly 40 percent over the past year, reaching a 52-week high last Thursday.

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Carlyle's latest sale takes its total proceeds from CPIC share sell downs to about $5.1 billion. That would put Carlyle's profit from the CPIC deal at $4.3 billion, excluding any dividends it received on the holdings, according to Reuters calculations.

Goldman Sachs and UBS acted as joint book runners on the sale.

Carlyle has been investing in Asia for over a decade and has a portfolio of 38 current investments in Asia, including 19 in China, its website says.

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Carlyle's CPIC investment was led by X.D. Yang, a Hong Kong-based managing director and co-head of Carlyle Asia Partners.