Carlyle Group, one of the world's largest private equity firms, said on Monday it has closed its fourth Asia fund at $3.9 billion, the second-largest private equity fund ever raised for Asia investments.

The new fund adds to an estimated record $140 billion of uninvested capital, or dry powder, that private equity firms have raised for the region, prompting worries that there is too much money chasing too few deals.

But Carlyle's co-head of Asia buyouts, X.D. Yang, dismissed those concerns.

"The regional economy has become much, much bigger. Ten years ago, a $500 million equity investment was huge, but today it's a medium-sized deal," Yang told Reuters in an interview.

"The companies are getting bigger, the economies are getting bigger and the private equity funds and deals are getting bigger," he added.

Carlyle Asia Partners IV, which will invest in deals in Asia excluding Japan, is 53 percent larger than the firm's previous fund for the region and exceeded its target of $3.5 billion.

The new fund is second only to KKR & Co's $6 billion Asia fund raised last year.

Carlyle is also raising funds for a separate fund to invest in Japan, aiming to gather as much as $1 billion, sources with knowledge of the plans have told Reuters.

Carlyle, which set up its first office in Asia in 1998, has $13.6 billion in assets under management in buyout, growth, yuan and real estate funds across Asia, including Japan.