Private Equity Firms Hot in Hong Kong Today, Focusing on Greater China Investments

1. Baring Private Equity Asia

The Baring Private Equity Asia has recently been reported in the South China Morning Post on 11 of March 2008(Reuters) that it stuck a deal to invest US88 million in China CBM Investment Holdings(CCBM), a Mainland China's producer of coalbed methane. Chengwei Ventures is also an investor in the deal.

CCBM was formed from a management buyout of Asian American Gas, one of the first foreign companies to engage in the exploration, development and production of coalbed methane.

2. Rocket Capital Investment

The firm was established by the mainland basketball star Yao Ming's finder of Leslie Alexander, to cash in on his new mainland business connections. Mr. Alexander is its sole investor, and Forbes magazine estimates his worth at US$1.5 billion.

In 2007, the firm poured US$200 million into some of Hong Kong's biggest IPOs. In 2008, the firm is planning to invest another US$200 million to focus instead on buying listed shares and making other types of investments, but will be more careful this year, according to its managing director of Kenneth Huang.

Rocket Capital's investment are in Great China, focusing on the concessions and management of sports facilities, travel and leisure, which includes railways, airlines and the vehicle sector; and entertainment, such as sports televisions and other media, but avoids companies that it feels mistreats animals, based on Mr. Alexander's love for animals and support for the Humane Society. He once declined to invest in a national hot pot chain before it went public, for he prefers his lambs alive.

3. Harvest Capital Partners

Harvest Capital Partners was formed in May 2006 by the Chinese state-owned conglomerate China Resources Holdings, to launch or run two overseas private equity real estate funds, including one focused on Middle East cash, with combined sized of about US$1 billion, encompassing the Greater China market, including Hong Kong and Marcau.

It has invested in seven projects in Beijing, Chongqing, Guiyang and Hong Kong, involving 70 per cent of the raised fund. It will announce more deals in Tianjin and Wuhan shortly. Among the projects, only one is related to China Resources Holdings, subject to its good returns to the funds.

4. TPG Capital(formally known as Texas Pacific Group)

As one of the world's largest private equity firms from the United States, the buyout specialist TPG Capital is sharpening its focus on strategic mainland Chinese industries amid the economic slowdown in other markets around the world.

Ms. Mary Ma Xuezheng, managing director in Hong Kong for TPG, who jointed the firm six months ago(or in May 2007) after her retirement from computer giant Lenovo Group as chief financial officer, said that some of the most attractive mainland sectors for TPG include financial services, retail, technology and resources. There are also new opportunities related to the environment, including in terms of clean energy and environmental protection.

"All the parters in TPG are very focused on China", Ms. Ma said.

TPG is currently holding controlling interests in Shenzhen Development Bank and private lender Minsheng Bank. TPG is also among those seeking Morgan Stanley's stake in the investment bank of China International Capital Corp.