Actis pays $50m for Beijing hot pot chain

The private equity firm continues to show interest in China’s strong domestic consumer industry. The firm, which opened its first office in China in 2000, has partners with the Macquarie Group, Avenue Capital and Warburg Pincus on Chinese investments.

Hot pot: growing fast

Emerging markets investor Actis has paid $50 million for a majority stake in Xiabu Xiabu Catering Management, a Beijing-based “hot pot” restaurant chain.

Hot pot, a style of dining in which customers cook their own meat and vegetables in a boiling pot of spicy soup, is among the fastest growing segments in the Chinese restaurant industry, Actis said in a statement. Because hot pot restaurants employ no chefs and use a centralised kitchen, Xiabu will be able to expand and gain economies of scale easily, Actis said.

Xiabu currently has 53 outlets in Beijing, and will have 60 locations at the end of 2008. Actis says it plans to triple the number of Xiabu’s outlets in the next three years.

The firm has invested in several consumer-focused Chinese companies this fall. In October the firm partnered with Macquarie Group and Avenue Capital to invest $103 million in education services provider Ambow, and separately partnered with Warburg Pincus to invest $65 million in budget hotel chain 7 Days Inn Group.

Actis set up its first office in China in 2000. Today, the firm has 12 professionals in its Beijing office.