Private (Equity) Lessons

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The FT reports a surge of private equity deals in Asia:

    “Private equity firms in Asia are on track for another record year for investments as the industry becomes entrenched in a region where it was barely present a few years ago.

    The value of announced transactions in Asia, excluding Japan, in the first half of this year was $22.13bn, up 73.5 per cent compared with a year earlier, with volumes for Australia and India already near or above full-year 2006 levels, according to Thomson Financial…”

Private equity in China is still strong, but in regional terms “dropped back to fifth place with only $678.7m of deals so far this year compared with $4.22bn in the first half of last year”.

At least one firm in China will be allowing itself to smile. Carlyle, which has been beset by deal approval problems, may finally have some good news. The FT notes:

    “The Carlyle Group, whose attempts to invest in a state-owned chemical producer [Shandong Haihua] and a bank [Chongqing City Commercial Bank] in China were frustrated this month, is close to sealing a deal for a stake in a hotel management company [the private Kaiyuan group]…”.

    As private equity firms shift attention to the Chinese private sector, the government, which is taking a tough approach to foreign buy-outs of state firms, has not erected similar barriers in the dynamic and growing private sector.”

It seems a lesson has been well learnt! Government policy, and nationalist sensitivities, needs to be considered when developing business strategy in China. Having the government as a shareholder (as Blackstone does) may help planning on that front. The FT wonders whether Carlyle will go down the same route.

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One Response to “Private (Equity) Lessons”

  1. Finance information » Blog Archive » Private (Equity) Lessons Says:

    […] , may finally have some good news. The FT notes: “The Carlyle […] Original post by Jeremy Gordon and powered by Img Fly

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