Babson makes first Asian investment

The US-based firm has invested $15m in a Chinese steel parts maker along with CDH Investments, China Everbright and Asia Mezzanine Capital.

Babson Capital Management, a US-based investment firm, has invested $15 million in the form of senior subordinated notes with warrants in steel casting business Yingliu International

Based in China’s Anhui province, Yingliu represents Babson's first Asian deal. Other investors in Yingliu include China-focused firms CDH Investments and China Everbright Investment Management, as well as Hong Kong-based Asia Mezzanine Capital Group.

“This investment represents an important asset class for Babson Capital and we look forward to pursuing similar opportunities in the Asian market,” said Mike Hermsen, a managing director at Babson Capital.

The investment in Yingliu was arranged by Babson Capital's two-strong Asian investment team, with one member currently in Tokyo but relocating to Hong Kong in March, and another currently in Shanghai but relocating to Beijing soon, according to the firm's spokesman. The Asian team is part of the 18-strong mezzanine and private equity group led by Hermsen and managing directors, Mike Klofas and Rick Spencer. 

In December 2008, Babson Capital closed the Tower Square Capital Partners III, a mezzanine and private equity fund, on $1.58 billion. The fund typically invests in companies with enterprise values of less than $200 million in the United States.

Babson Capital is part of international financial services firm MassMutual Financial Group and manages approximately $108 billion as of December 2008. The firm has offices in London, Tokyo and Australia.