March 1, 2012 / 3:31 AM / 6 years ago

UPDATE 2-Carlyle's SE Asia head quits as deal drought grinds on

* Carlyle’s barren run in SE Asia exceeds 10 years

* TPG, CVC Capital dominate dealmaking in SE Asia

* Competition for top talent intensifying (Adds comments, data on regional deals, fundraising)

By Janeman Latul and Stephen Aldred

JAKARTA/SINGAPORE, March 1 (Reuters) - Carlyle Group’s Southeast Asia head has left the firm after four and a half years without landing a deal, underlining the struggles that even the world’s biggest private equity firms face as they try to penetrate Asia’s emerging markets.

Carlyle’s barren run in Southeast Asia has now extended to 10 years under three regional heads, according to a source familiar with the matter, after the firm confirmed on Thursday that Anand Balasubrahmanyan had left.

Balasubrahmanyan’s departure comes as global and regional rivals like Blackstone Group L.P. and KKR & Co pour money and resources into the region to tap its vast markets and to compete with CVC Capital and TPG Capital, the acknowledged leaders in the region.

The intense focus on Southeast Asia is leading to talent wars, say industry insiders, as funds poach the politically connected insiders they need to clinch deals from investment banks.

“Team building will intensify, especially at the senior deal sourcing level,” said Jag Dhaliwall, managing director at executive search firm Principle Partners. “Good M&A bankers and management consultants are likely to be targeted by these funds,” he added.

A Carlyle spokesman confirmed Balasubrahmanyan’s departure, but would not elaborate on why the former Morgan Stanley investment banker left. Balasubrahmanyan declined to comment.

Sources with knowledge of the matter told Reuters that Balasubrahmanyan’s team had not been able to clinch deals in Southeast Asia, which was one of the reasons for his departure.

The split was amicable, said one of the sources.

Carlyle’s spokesman declined to comment on plans to replace Balasubrahmanyan, who joined Carlyle as a director in late 2007 when the buyout boom period was coming to an end.

FUNDRAISING BOOM

Southeast Asia is enjoying a fundraising boom as global firms search the region for speedy growth and uncrowded markets. Indonesia, with its youthful middle class, has become a particular focus for private equity with 21 funds raising money to invest there, according to data provider Preqin.

But clinching deals in Indonesia is not easy and the dealmaking landscape is dominated there, as elsewhere in Southeast Asia, by CVC and TPG.

Industry insiders put their market edge down to the work of two local dealmakers, CVC’s Sigit Presetya and Patrick Walujo at TPG’s associate Northstar.

Indonesia has seen 18 private equity deals since 2005 with $1.8 billion, according to Thomson Reuters data as of September 2011. CVC and TPG were responsible for more than half of that figure, investing in companies like retailer Matahari Department Store and coal group PT Delta Dunia Makmur.

Carlyle last year came close to buying a stake in Indonesian consumer firm GarudaFood, which would have been its first acquisition in Indonesia, but the Japanese beverage firm Suntory snatched the deal away. (Reporting by Janeman Latul in Jakarta, Saeed Azhar in Singapore and Stephen Aldred in Hong Kong; Editing by Matt Driskill)

Our Standards:The Thomson Reuters Trust Principles.
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