Actis sells restaurant chain to General Atlantic

Actis has sold China investment Xiabu Xiabu to the US private equity firm as the first realisation from its China Fund III.

Actis has completed an exit from one of its China-based portfolio companies, Xiabu Xiabu, selling the hotpot restaurant chain to General Atlantic, according to an Actis spokeswoman. The US-based firm bought all of Actis’ shares in the company.

Actis declined to disclose the financial details of the sale, but said it generated a “good return” on the initial $51 million investment in the business. Another source close to the matter said the return was more than 3x. 

The initial investment in the restaurant chain came from both Actis’ China Fund III and China Fund II and the sale marks the first realisation from Fund III. 

In 2008, Actis bought a majority stake in Xiabu Xiabu, which only had 60 shops in Beijing and Tianjin at the time. The business now has more than 300 restaurants across China. The spokeswoman also added that Actis has been focusing on helping Xiabu Xiabu implement international health standards.

“In Xiabu Xiabu we found a well-run, scalable business, keen for the next phase of development. The organic growth since our investment in 2008 has been remarkable,” said Dong Zhong, partner at Actis in Beijing.

“Actis’ investment in Xiabu Xiabu brought us a brand new operating vision that helped to strategise our development plan, standardise our corporate operations and attract talented staff,” Ho Kuang-chi, founder and chairman of Xiabu Xiabu, said in a statement. 

Actis currently has $5 billion in assets under management across Asia, with over $1 billion invested in Chinese companies and 13 employees in its Beijing office. The firm recently made another food and beverage investment, taking a majority stake in restaurant chain Bellagio, PE Asia reported in September.

General Atlantic is a global private equity firm with $17 billion in assets under management worldwide and four offices in Asia, including Beijing and Singapore. General Atlantic has made nine investments in China, not including Xiabu Xiabu, according to the firm.