US buyout giant Carlyle Group (CG.NASDAQ) bought a controlling stake in China’s Mandarin Hotel Holdings in a bid to enter the country's booming mid-tier hotel market, Bloomberg reported. Carlyle will acquire a 49% stake in the company, making it the largest shareholder. The acquisition will be structured through a US$2.6 billion fund, although Carlyle did not disclose the value of the deal. Mandarin CEO Wu Hai said the hotel would use the capital to expand to new cities, particularly those that are well-developed, but the company does not plan to go public. "We see good potential in the mid-tier hotel sector, which is less volatile, as luxury travelers tend to trend down when the economy isn’t good," said the fund's managing director Eric Zhang. Mandarin runs 25 hotels in six cities and owns the brands of Crystal Orange Hotel and Orange Hotel.