Larsen & Toubro Ltd., India’s largest engineering company, plans to create a $300 million private equity fund to invest in power, road projects in India, said N. Sivaraman, senior vice president for financial services reported Bloomberg. Larsen’s plan follows an investment by Morgan Stanley and a group of companies that invested in utility Asian Genco Pte in India’s biggest private equity transaction this year. Morgan Stanley Infrastructure Partners and a group of global investors will invest $425 million in Asian Genco, which is developing about 4,000 megawatts of hydro, thermal and wind power projects in India.
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China Grand Automotive Group, a car dealer part-owned by private equity firm TPG Inc., hired Goldman Sachs Group Inc. and China International Capital Corp. for an initial stock sale, said sources as reported by Bloomberg. China Grand Automotive may sell about $1 billion of shares as early as this year, probably in Hong Kong, said one of the people, who declined to be identified because the information is private. China Grand Automotive was founded in 2006 as a 3 billion yuan ($439 million) venture between TPG and Xinjiang Guanghui Industry Investment (Group) Co., according to a job posting on Web site Alljobsearch.cn. It operates more than 100 car dealerships in the country, according to a statement in December. Carlyle Group, the world’s second- largest private-equity firm, raised $2.55 billion for its third fund aimed at deals in Asia. Carlyle Asia Partners III brings the total committed for investments in the region by Carlyle to $5 billion, the Washington-based firm said in a statement recently as reported by Bloomberg. “We believe that 2010 is shaping up to be a very good year to make investments in Asia as the region bounces back strongly from the global economic crises,” X.D. Yang, co-head of Carlyle Asia Partners, said in the release. Carlyle Asia Partners funds have made 21 investments in the region, where the company set up private-equity operations in 1999. With $88.6 billion in assets under management, Carlyle trails only New York-based Blackstone Group LP by that measure. Shanghai-Pudong Government announced that they had granted SinoLatin Capital the approval to raise and to manage RMB-denominated private equity funds. “We are deeply appreciative and proud to have been granted this license, which signals the Chinese government’s support for our efforts to promote and expand the country’s investment relationship with Latin America,” said Luis Gomez Cobo, Founding Partner and Chairman of SinoLatin Capital. As of March 2010, SinoLatin Capital’s subsidiary in China will be a “Private Equity Investment Management Company”. SinoLatin Capital becomes one of the first foreign financial institutions to be granted the license in China and now joins a very small group of foreign private equity firms with this distinction, including the Carlyle Group, the Blackstone Group and Apax Partners. To date, SinoLatin Capital is the only Latin America-focused firm to have been approved to manage RMB-denominated private equity funds in China. Located in Shanghai’s financial district, SinoLatin Capital is the first financial advisory and principal investment firm focused exclusively on cross border transactions between China and Latin America. SinoLatin Capital’s industry focus is natural resources. Fred Hu, a high-profile Chinese dealmaker is stepping down as a partner of Goldman Sachs with plans to launch a new private equity fund reported Reuters. Hu, who worked for the Goldman Sachs for 13 years, will retire as a partner in April, but remain as an advisory director of the firm. An investment arm of China Construction Bank, China’s top property lender, Singapore state investor Temasek Holdings, and Goldman Sachs were expected to help Hu launch the China-dedicated fund, according to sources with direct knowledge of the plan. “Given Hu’s high influence in China and now strong support from his investors, I believe Hu’s new private equity fund will make the tough competitions for China deals even tougher,” said one of the sources. “It’s interesting to see so many investment bankers are now stepping into the private equity industry,” he said. Read More » Boston-based private equity giant Bain Capital is considering following a number of its rivals in raising a yuan-denominated fund in China reported Reuters. The allure of raising a local currency yuan fund is strong for global private equity firms, some of which have already launched plans to raise funds. But setting up a yuan fund is problematic because only Chinese investors are allowed access under current Chinese rules. “The short answer is, of course we’re considering it; most of our peers have either done it or announced their intentions to do it,” said Bain Capital managing director Mark Nunnelly, at the Reuters Private Equity and Hedge Funds Summit. He said such a fund would provide an opportunity for potentially having advantage investing in industries where “speed of accomplishing an investment is important.” “It clearly comes with the trade-off — if you’re investing both an RMB-fund and another Western world-currency denominated fund; obviously thinking through all the conflicts between your Chinese LPs and your global LPs is an important issue to tackle,” he said. “So we will likely be a ‘fast-follower’ not a leader, because we think it is more important to get that complex set of alignments done before, as opposed to figuring it out on the fly.” Nunnelly would not be drawn on how active such plans are, but said that he’d be “very surprised if we have this conversation in 18 months from now and we are not actively managing an RMB fund.” Read More » Carlyle Group, one of the world’s largest private equity firms, will set up a yuan-denominated fund with Fosun Group, a Chinese privately owned company whose businesses span steel, mining and property reported Bloomberg. Washington-based Carlyle and Fosun have invested $100 million in the fund, which will focus on investments in “high-growth companies,” and will seek more capital from local Chinese investors. Blackstone Group LP was the first global private-equity firm to set up a 5 billion yuan ($731 million) fund with the Shanghai government in August to target investments in the eastern coastal city and neighboring areas. Carlyle is also planning a domestic Chinese private-equity fund with the Beijing government. Carlyle will operate two yuan-denominated funds as it expects to finish raising capital this year, co-founder David Rubenstein said in a telephone interview with Bloomberg. “We haven’t set a target for it yet,” he said. “I expect it could be done by the end of the year, could be done sooner.” The company may seek about 5 billion yuan for the fund set up with the Beijing government, a person with knowledge of the matter said. The fund to be set up with Fosun will seek investments from pension funds and wealthy individual Chinese to money managers, primarily in Shanghai, Rubenstein said. Read More » An investment arm of Bank of Communications, China’s No.5 lender, said recently that it aims to raise $250 million to $500 million for a private equity fund focused investing in China reported Reuters. The offshore fund, the first private equity fund for BOCOM International, would focus on China’s consumer industries, high-speed rail systems, healthcare, clean energy and infrastructure companies, said Simon Hua, head of private equity. Shanghai-based BoCom is 20% owned by HSBC Holdings Plc. The dollar fund would invest in companies with IPO potential and would be listed in Hong Kong in 12 to 24 months, Hua said. He added: “We see a lot of state-owned entities restructuring; there are opportunities there. As a central government-owned bank in China, we are actually well positioned for that kind of restructuring.” Read More » Affinity Equity Partners, an Asia-focused private equity firm founded by former top UBS bankers, plans to raise a new multi-billion-dollar buyout fund reported Reuters. The firm, founded in 2002 by K.Y. Tang, former chairman of UBS Capital, Asia Pacific, aimed to exceed the size of its most recent fund — Affinity Asia Pacific Fund III LP at $2.8 billion — for the new fund. Affinity’s LPs include many U.S. and European pension funds, including California Public Employees’ Retirement System, also known as CalPERS, the biggest U.S. pension fund. Affinity closed its third buyout fund, the $2.8 billion Affinity Asia Pacific Fund III LP, in 2007 and more than half of the capital had been invested, one of the sources said. Besides Jakarta, Affinity also operates offices in Hong Kong, which is its headoffice, Seoul, Tokyo, Singapore and Sydney. In Australia, the fund aims to sell its portfolio company, Loscam, a pallet maker, for more than $433 million. Citic Capital Holdings Ltd., 40% owned by China’s sovereign wealth fund, raised $925 million in its second China buyout fund to focus on the consumer and manufacturing industries reported Bloomberg. The fund exceeded the original target of $750 million, the company said in a statement. Citic Capital raised $425 million in its first China buyout fund in April 2007, 70% more than planned, said Cindy Tam, a spokeswoman for the Hong Kong- based company. “Investors are still very confident about China’s private- equity market despite the recent economic tightening in China,” said Hubert Tse, head of the international business group at Yuan Tai PRC Attorneys in Shanghai. “It reflects the increasing financial strength of some Chinese funds which are becoming major players in the Asia private-equity market, not just in China.” Citic Capital’s first buyout fund bought stakes in Harbin Pharmaceutical Group Co. with Warburg Pincus LLC and Fushun Excavator Co., China’s biggest maker of hydraulic crawler cranes, Tam said. The fund invested in Guan Sheng Yuan (Group), one of China’s biggest confectionery companies, which sells White Rabbit candies. Citic Capital, founded in 2002, manages more than $3 billion raised from international and Chinese investors, and its businesses include private equity, real estate and asset management, the statement said. Hong Kong-listed Citic Pacific Ltd. and CITIC International Financial Holdings Ltd. each own 27.5% of Citic Capital, while management of Citic Capital owns 5%, Tam said. China Investment Corp (CIC) has invested €685m (US$949m) into Apax Partners’ €11.2bn (US$15.5bn) fund and CIC also acquired a 2.3% stake in the management company of one of Europe’s biggest private equity funds reported the Financial Times. Apax offered investors in its latest fund the option to transfer as much as €800m of their unfunded commitments – the part of their investments still to be called for future deals – to the Chinese fund. Martin Halusa, chief executive of Apax, said: “We never had a single investor tell us they could not fund their commitments. Most investors who do want to take this up are not doing it for liquidity reasons, but for a variety of reasons, such as a strategic shift from investing in funds to investing directly in deals.” Read More » New Horizon Capital, whose co-founders include the son of Chinese Premier Wen Jiabao, aims to raise a $1 billion private equity fund to invest in domestic industry leaders ready to make initial public share offerings reported Reuters. This would be the third and largest private equity fund for New Horizon, which had about $500 million under management since it was established in 2007, according to sources. New Horizon Capital recently completed raising $600-$700 million for its latest fund by a first closing date, with capital commitments from Japan’s Softbank Corp and Singapore state investor Temasek Holdings, sources said. Softbank, run by influential Japanese tycoon Masayoshi Son, and Temasek were long-time investors since the firm launched its first fund in 2007, the source added. Wen Yunsong, also known as Winston Wen, helped form New Horizon Capital in 2005, a few years after graduating with an MBA from Kellogg School of Management at Northwestern University in the United States, according to the sources close to Wen. Between graduation and the launch of New Horizon Capital, Wen started a telecoms equipment maker whose key clients included large banks and securities firms, according to Chinese and Hong Kong media reports. Wen later sold the company. Read More » BTS Investment Advisors, a private equity fund based in Zurich and Mumbai, plans to start a $150 million fund to invest in Indian clean energy companies amid rising interest in green power to fuel Asia’s top economies reported Bloomberg. BTS expects to start the fund by April with an initial $60 million and increase that to $150 million over the next year, Managing Partner K. Srinivas said. “There has been a perception that the clean energy industry is thriving on subsidies, but we have a different opinion,” Srinivas said recently. “The industry is maturing and it is now being commercially driven,” because of better government policy, including a more liberalized power trading market and clearer tax structures, “Like the technology sector in the 1990s, clean energy from 2010 onwards will be the main theme for private equity.” BTS plans to initially invest in companies producing power from wind, biomass and water, as well as those manufacturing renewable energy equipment, he said. Read More » Axiom Asia Private Capital Management Services, L.P. (“Axiom Asia”) announced recently the final closing on its second fund, Axiom Asia Private Capital Fund II, L.P. (the “Fund” or “Axiom II”). The Fund’s total investor commitments of US$950 million represent the maximum amount the Fund could raise under agreement with its investors and exceeded the initial target of US$750 million. The Axiom II is the successor fund to Axiom Asia Private Capital Fund I, L.P., Axiom Asia’s first fund, which had US$440 million of investor commitments and commenced investing in 2006. The Fund will invest in a portfolio of management buyout, venture capital, growth capital and other private equity funds in Greater China, India, Japan, Southeast Asia, Korea and Australia. The Fund will typically target investments of up to US$100 million per invested fund and will also target select investments in secondary fund interests and portfolio companies alongside invested funds. Read More » Nature Elements Capital, a Chinese investment firm, aims to raise up to US$400 million for a private-equity fund focused on clean energy in China reported the Dow Jones Newswires. The fund will have both Chinese yuan and U.S. dollar components. The firm aims to raise about CNY1 billion (US$146 million) and about US$150 million to US$200 million. The U.S. dollar and yuan funds may invest in tandem or individually, depending on the investment opportunity, said KK Chan, the firm’s founder. The firm is approaching a range of investors in China and around the region, as well as in the U.S. Nature Elements Capital signed a memorandum of understanding recently with the Hangzhou government, which will become a sponsor with CNY100 million. The new fund will invest in companies involved in clean energy, energy efficiency and environmental protection. Although there have been some very expensive deals in the clean energy industry, “there are still lots of investment opportunities available for investors who know the market,” Chan said. Chan was formerly managing director and head of investments for Greater China at Climate Change Capital Ltd. Prior to that, he was a managing director at CLP Renewables, where he ran the clean energy division for Asia Pacific. BC Partners Ltd., the private equity firm that has stakes in Office Depot Inc. and Foxtons Ltd., plans to start raising about 5.8 billion euros ($8.4 billion) for leveraged buyouts this year reported Bloomberg. “We expect to be in a position to start raising the next fund in the latter part of this year,” managing partner Charlie Bott said in an interview. “Targeting the size of our current fund is consistent with our historical pace of investment.” “The mood of our investors was grim at the beginning of last year,” Bott, 50, said. “It is better now, but still cautious. They will be focusing on how successfully we have been able to invest the money.” The firm valued assets in its current fund, which has more than 100 investors, at 1.2 times the acquisition cost at the end of September. This places BC Partners slightly below the 1.28 times multiple the top quartile buyout funds that were raised the same year posted at the end of June, according to data compiled by Preqin. The median return of funds bigger than $4.5 billion stood at a 0.93 multiple, Preqin said. Read More » Carlyle Group, the world’s second- largest private-equity firm, said it will set up a domestic Chinese private equity fund with the Beijing government. The fund, to be registered in China’s capital, will be established by the Beijing Municipal Bureau of Financial Work and Carlyle Asia Partners, Carlyle said in an e-mailed statement as reported by Bloomberg. The yuan-denominated fund will be entitled to “preferential treatment” from the government, it said. Carlyle follows Blackstone Group LP, which became the first global private-equity firm to set up a 5 billion yuan ($731 million) fund with the Shanghai government in August to target investments in the eastern coastal city and neighboring areas. China is stepping up efforts to build its own private equity industry as the government seeks to foster corporate governance and strengthen capital markets. The fund “will help expand our investment capabilities in Beijing and across China, further Carlyle’s strategy of localizing our franchise in China and contribute to the healthy development of the local private equity industry,” Daniel A. D’Aniello, founding partner and managing director of the buyout firm, said in the statement. Washington-based Carlyle has invested more than $2.5 billion in China in more than 40 deals, according to the statement, and already operates a smaller yuan fund in China through its growth capital unit. It manages $87.6 billion of assets globally in 65 funds as of Sept. 30. Auda International LP, the $5 billion private-equity unit of Germany’s Quandt family, plans to invest as much as $300 million in Asia over the next three years as it expects deals in the region to pick up. The fund will allocate 40% of investments in China and 30% in India, and will look to put its money in small- and medium-sized firms where there is less competition and more reasonable valuations, Hong Kong-based Pak-Seng Lai, Auda’s managing director and head of Asia, said recently as reported by Bloomberg. China is luring private-equity firms seeking to revive deal-making after the global credit crisis limited debt used for leveraged buyouts. In August, Blackstone Group LP, the world’s biggest buyout company, agreed to set up a 5 billion yuan ($731 million) private-equity fund with the Shanghai government. A “big theme” for private-equity firms will be domestically focused companies, rather than export-oriented ones. “Over the last few years, the export business has been extremely competitive,” said Lai. “Investing money in a contract manufacturer with razor-thin margins is very difficult to generate returns on equity.” Auda, which invests its money with fund managers, will focus on the health-care, consumer products and green energy industries, said Lai. The largest investors in Auda are members of the Harold Quandt family, cousins to the Quandt family, which owns a majority stake in BMW AG, Germany’s No 3 automaker. China Forestry Holdings Group, a forestry plantation operator backed by the Carlyle Group, plans to raise up to $203 million via an initial offering of shares in Hong Kong late this month reported Reuters. The company, also invested in by private equity firm Partners Group, is offering 750 million shares at a range between HK$1.6 ($0.207) and HK$2.1 apiece and the IPO pricing will be fixed on Nov. 24, according to a term sheet obtained by Reuters. China Forestry plans to list on the Hong Kong stock exchange on Dec. 3, the term sheet shows. UBS and Cazenove are joint sponsors for the IPO. ($1=7.749 HK Dollar) Fubon Financial, parent of Taiwan’s No.2 insurer, and China’s State Development & Investment Corp will set up a 3 billion Chinese yuan ($440 million) private equity fund, the Commercial Times reported citing a Fubon executive. The private equity fund, aiming to tap industries in Fujian province, will be the first such fund to operate across the Taiwan strait, the paper said. Fubon will take a 30 percent stake in the fund, State Development & Investment Corp will hold 40 percent and an investment firm controlled by Fujian province will hold the remainder, the paper said, citing Fubon president Victor Kung. Read More » |
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