UPDATE 1-Carlyle says cut size of its Japan fund in 2009

* Carlyle says reduced Japan fund by 50 bln yen in ’09

* Says Japan private equity picking up now

* Plans to raise another Japan fund “when the time comes”

(Adds comment, detail)

By Junko Fujita

TOKYO, March 4 (Reuters) – Global private equity firm Carlyle
[CYL.UL] reduced the size of its fund designated for Japanese
investments by 50 billion yen ($610 million) to 165.6 billion yen
at the end of 2009 due to a dearth of deals in the country at the
time, a company official said on Friday.

Carlyle, which in 2006 launched the 215.6 billion yen fund,
known as Carlyle Japan Partners ll, cut the size as the country’s
private equity market had dwindled in the wake of the global
financial crisis.

“The situation back then had clearly changed since we started
the fund in 2006,” Tamotsu Adachi, co-head of Carlyle in Japan,
told Reuters.

He added that the Japanese market has been picking up since
then and that the firm plans to raise another fund focused on
Japan “when the time comes”.

Carlyle and Advent International are the only two global
private equity firms with funds dedicated to Japan, although
Advent has not made any investments pubicly since it set up its
fund in 2008.

Some private equity firms, such as a unit of Bank of America
Merrill Lynch (BAC.N: Quote, Profile, Research), retreated from Japan after the market was
hit in 2008.

Carlyle earlier this week said it would purchase Japanese
ball bearing maker Tsubaki Nakashima from the private equity unit
of Nomura Holdings (8604.T: Quote, Profile, Research) as its fifth investment using the
Japan fund. [ID:nTOE72001U]

Carlyle will help Tsubaki Nakashima, valued at 66 billion
yen, expand its business abroad, he said.

More Japanese companies are turning to global private equity
firms as they look to expand overseas, Adachi said, with many
domestic markets stagnating.

“We have some transactions with a high probability of success
in our pipeline now. That’s the difference from before.”

Investors in private equity funds typically commit a certain
amount, but only need to provide money when the firm makes a
request to drawdown funds.

Adachi declined to comment on the period for which Carlyle’s
Japan fund is allowed to make investments.
(Reporting by Junko Fujita; Editing by Joseph Radford)