2010 Annual Report - The Carlyle Group

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In China, a focus on the middle classPart of our investment strategy is seeking trends that create opportunities and investing earlyto create value. In China, the country’s rapidly growing middle class is creating increasingdemand for higher quality food and a greater selection of protein products. As a result, threeinvestments recently completed by Carlyle Asia Partners III, L.P. focus on companies in China’sagriculture and food industries, as we recognized and seized what we saw as substantial opportunities.We believe these three companies have the potential to help modernize China’sfood industry and create a more efficient food supply, giving more options to the country’sburgeoning middle class.100 millionEstimated number of households expectedto be added to China’s middle class by 2020China Fishery Group. In July 2010, Carlyle invested $155 million to reinforce ChinaFishery’s position as a reliable and responsible supplier of sustainable fish productsto the global market and animal protein supply chain. China Fishery is a well-runcompany with an established track record and well-earned position in the globalfishing industry. In addition to partnering with the company’s management to growits businesses, we are working to further advance China Fishery’s corporate socialresponsibility commitments, particularly to set higher standards in sustainablepractices for the industry.C.P. POKPHAND CO. LTDC.P. Pokphand Co. In July 2010, Carlyle made a $178 million investment in C.P.Pokphand Co., one of China’s largest livestock and aqua feed producers. Growinganimal protein consumption and more stringent food safety standards in China areincreasing demand for high-quality animal feed products from responsible, experiencedproducers such as C.P. Pokphand. Carlyle’s experience in the food industryvalue chain brings valuable insight to the company as it continues to focus on producinghigh-quality products and becoming a leading supplier to China’s livestockfarming industry.Guangdong Yashili Group. In 2009, Carlyle acquired a 17.3% stake in Yashili, oneof China’s largest infant formula companies. In July 2010, Carlyle acquired anadditional 11.9% interest in the company, and then in November 2010, Yashili successfullycompleted an IPO, which diluted Carlyle’s ownership stake to 24.4%. Alsolast year, we helped the company recruit a chief quality officer to supervise productquality control and supply chain protocols. We assisted Yashili in establishing a FoodQuality and Safety Advisory Committee charged with introducing international bestpractices and providing strategic guidance to the board of directors. The advisorycommittee is the first of its kind in the Chinese dairy industry and represents a significantstep forward in Yashili’s mission to build a world-class quality control system,improve the brand’s competitiveness and expand internationally.28 The Carlyle group
section TWO innovationThe Carlyle group 29
Page 1: GLOBAL ALTERNATIVE ASSET MANAGEMENT
Page 6 and 7: Diversificationcreates opportunityO
Page 8 and 9: Experienceto invest wiselyOur stron
Page 10 and 11: Collaborationdefines our cultureOur
Page 12 and 13: Daniel A. D’AnielloCo-Founder and
Page 14 and 15: Carlyle’s Operating Committeecomp
Page 16 and 17: How is Carlyle different?We have th
Page 18 and 19: Our culture ofperformance hasenable
Page 20: Improving performance in the health
Page 23 and 24: section one PerformanceOur teams id
Page 26 and 27: We apply creative thinkingand innov
Page 28: Fund of Funds. We expect to add Fun
Page 33 and 34: section TWO innovationCorporate Cit
Page 35 and 36: section Three diversificationOur fo
Page 37 and 38: section Three diversificationMedica
Page 39 and 40: section Three diversificationGrowin
Page 41 and 42: section Three diversificationin the
Page 43 and 44: section Three diversificationFund-o
Page 45 and 46: section Three diversificationGrowth
Page 47 and 48: section four ExperienceNavigating c
Page 49: section four ExperienceBuilding upo
Page 52 and 53: We encourage a high degreeof collab
Page 54 and 55: The value of collaborationCollabora
Page 56 and 57: Deep industry experience applied gl
Page 58 and 59: We are keenly awareof our responsib
Page 60: To strengthen our ties to the commu
Page 63 and 64: our / purposeInvest wisely. Create

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