Open wide, Mummy wants you to eat well and grow up nice and strong. So does the Carlyle Group. want to grow. In fact, David Rubenstein said in a speech earlier this year that most of Carlyle’s growth will be in China and India.
With that strategy in mind, Carlyle bought a 17%-ish stake in one of China’s biggest baby-formula companies, Yashili Group Co. These guys were the people who thought it is OK to put some melamine in its baby formula. Apparently, Melamine passes food tests and adds minerals, but has an unfortunate side effect when eaten by humans. Carlyle is the latest in a line of PE firms who see the potential for profits here, including Kohlberg Kravis Roberts & Co., CDH Investments and Hopu Investment Management Co. I just hope they can bring in some ethical thinking, not just growth of profits. Carlyle has a strong management team with a solid ethical core and I think this will impact on Yashili Group's guiding principles.
Jacoline Loewen, (jbloewen at loewenpartners.com) is a partner in a private equity firm, Loewen & Partners, dedicated to raising capital for family business owners and developing their growth strategies.
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