Carlyle Group has unveiled plans to work with city authorities in Beijing to establish a renminbi fund that will enable it to make local currency investments across China.
Carlyle has signed a memorandum of understanding with the financial arm of the Beijing municipal government and expects the fund to begin operation later this year.
Carlyle said that the Beijing municipal government would "support" the renminbi fund and "facilitate" its efforts to secure investor backing from local pension funds and institutional investors.
Carlyle said the fund "is expected to play an important role in the development of local enterprises and the structural transformation of local industry". Its existing suite of dollar-based funds may co-invest as a minority partner in deals alongside the renminbi fund.
The big question, of course, is what are the Beijing officials getting out of this?
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