U.S. private equity fund Carlyle Group has raised about $720 million from the sale of a stake in China's third-largest insurer, a source with direct knowledge of the deal said on Saturday.

The New York based firm sold 220 million Hong Kong-traded shares of China Pacific Insurance (Group) Co Ltd (CPIC) at HK$25.5 each, added the source who was not authorized to speak publicly on the matter, putting the block deal at HK$5.61 billion ($723.3 million).

Shares of CPIC have gained about 20 percent since the beginning of the year in Hong Kong. The company also has shares traded in Shanghai.

Carlyle, through its Carlyle Holdings Mauritius and Parallel Investors Holdings units, had offered the 220 million shares at an indicative range of HK$25.50-$26.00, or a discount of 3.3 percent to 5.2 percent discount to Friday's close of HK$26.9, IFR reported.

Carlyle invested about $800 million in CPIC between 2005 and 2007 for a 17 percent stake, which has since fallen to below 5 percent.

Bank of America Merrill Lynch and Credit Suisse acted as joint bookrunners on the deal, IFR added.

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