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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