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Firms & Funds

British buyout shop 3i Group is planning a $1.5 billion India fund for infrastructure investments in sectors such as power and roadways, Reuters reported. The firm launched a $1.2 billion fund in 2008 for similar infrastructure investment in India. That fund is now 80 percent invested, Reuters said.

The Blackstone Group said it has agreed to manage Bank of America Merrill Lynch’s Asia real estate assets. Blackstone also will act as the general partner for the Merrill Lynch Asia Real Estate Opportunity Fund. Financial terms weren’t announced. BofA said that it has decided that the Merrill Lynch real estate assets in Asia aren’t core to its strategy for the region. Most of the Merrill Lynch Asia real estate team has agreed to join Blackstone.

CalPERS and GI Partners have formed a partnership where GI will manage and invest a $3.4 billion portfolio of industrial and logistics related real estate businesses from CalPERS. As part of the deal, CalPERS has transferred its CalEast Global Logistics to GI, which will manage it. John Saer, a former KKR partner, has joined GI as a managing director and executive chairman of the CalEast businesses. GI, of Menlo Park, Calif., is a private investment firm. CalPERS is a leading public pension fund.

As it attempts to wind down operations, Candover Investments has agreed to sell its private equity investment manager division to a group of its directors, Reuters reported. The division plans to sell up to 29 percent of its portfolio to a group backed by private equity firms Pantheon and Arle Capital Partners for roughly £60 million ($94.7 million), Reuters said. The sale is one of Candover’s last attempts to return cash to shareholders as it winds down.

The Carlyle Group has agreed to buy a 55 percent stake in Claren Road. Financial terms weren’t announced but Claren Road will get cash, ownership interest in Carlyle and performance-based contingent payments. Claren, a long-short credit hedge fund with $4.5 billion of assets under management, will reinvest nearly all of the cash proceeds back into Claren Road funds. Citigroup, which seeded Claren Road in 2006, and Goldman Sachs Petershill Fund, which bought a minority stake in 2008, are both selling as part of the deal. The transaction is expected to close by year end.

China’s foreign exchange regulator has approved a $3 billion pilot program that will allow foreign currencies to be converted into yuan for private equity investments, Reuters reported. The program would benefit private equity firms such as The Carlyle Group and Blackstone Group, which have been raising yuan-denominated funds, Reuters said, adding that the program would also give overseas pension funds and other investors a new avenue for investment in China. The program could begin as soon as this month.

After narrowing its losses in the third quarter, Egyptian private equity firm Citadel Capital will aim to improve the management of its portfolio companies, Reuters reported. The firm, based in Cairo, manages $4 billion in assets across the Middle East and Africa. It saw a net loss of 29.5 million Egyptian pounds ($5.1 million) in the third quarter of 2010, an improvement over the 94.8 million pounds it lost during the second quarter, Reuters said.

HSBC has spun off its Asia private equity fund management business, Reuters reported. Financial terms were not disclosed. The group’s management team now holds 80.1 percent of the business, with HSBC retaining the remaining shares. HSBC planned earlier this year to spin off this group, as well as four other regional private equity businesses, as it attempts to focus more on core operations, Reuters said.

JMI Equity has closed its seventh fund, JMI Equity Fund VII LP, with $875 million. With its new fund, JMI will continue its growth equity strategy, providing capital for acquisitions, recapitalizations and buyouts. The new fund will focus primarily on North American companies, with investments ranging from $10 million to $100 million each. JMI is focused on software, Internet, business services and health care technology companies. The firm has raised a total of $2.1 billion since it was formed in 1992. JMI has offices in Baltimore and San Diego, Calif.

Kohlberg Kravis Roberts & Co. has raised $515 million for its infrastructure fund, Reuters reported, adding that the fund will grow to more than $1 billion before reaching a final close. Plans for the infrastructure fund were announced in May 2008.China-focused Legend Capital is planning to raise at least $500 million across two new funds next year: a 1 billion yuan-denominated fund ($150 million) and a $350 million U.S. dollar fund, Reuters reported. The new funds will look for deals that would benefit from government support, in sectors including telecommunications, green energy and pharmaceuticals, Reuters said.

Morgan Stanley

will partner with the government of Hangzhou, China, to launch a yuan-denominated private equity fund, Reuters reported. The Wall Street bank signed a partnership agreement with the city, but has not released fundraising targets. Morgan Stanley is following in the footsteps of buyout shops Warburg Pincus and Kohlberg Kravis Roberts & Co., which recently announced plans to set up private equity units in Shanghai.

New York Life Investments said it has agreed to buy a 60 percent stake in Private Advisors LLC, an alternative investment firm and fund of funds manager with $3.9 billion of assets under management. Financial terms were not announced. Private Advisors’s equity holders will retain 40 percent. The deal is expected to close by Dec. 31.

As a means to combat climate change, the U.S. Overseas Private Investment Corp. said it will pour at least $300 million into new private equity investment funds focused on renewable technologies in emerging markets. The group will issue a call for proposals from private fund managers investing in businesses that promote renewable energy and the sustainable utilization of natural resources. The Overseas Private Investment Corp. was formed by the U.S. government in 1971. It is designed to complement the private sector in managing risks associated with foreign direct investment.

Rockley Group, a U.K.-based investment firm, has doubled the size of its Rockley China Fund LP after inking an agreement with the Shanxi Small and Medium Enterprise Investment Corp., the technology venture fund owned by the Shanxi provincial government in China. The two will partner to develop business opportunities in Shanxi, China’s leading coal mining region. The firm’s China operations are based in Beijing.

Houston-based Sheridan Production Partners has raised $1.8 billion for its second fund, Sheridan Production Partners II. The firm, which focuses on acquiring oil and gas properties across the U.S., aims to expand its holdings in East Texas, Louisiana and the Rocky Mountain region. The firm has raised more than $3 billion in equity since it was formed in 2006 by Sheridan Management and Warburg Pincus.

The Australian government has ruled that private equity firms must pay income taxes on asset gains, and not capital gains taxes, Reuters reported. The ruling stems from a 2009 dispute between the Australian Tax Office and buyout shop TPG Capital, which was taxed $628 million on the $1.4 billion profit it made by selling the department store chain Myer.