Invesco WL Ross has formed a joint venture with a subsidiary of China’s largest power producer, Huaneng Group, to pursue private equity opportunities in power generation.
Huaneng Capital Services, the financial holding company of the state-owned Huaneng Group, with own 50 percent of the joint venture, Huaneng Invesco WLR Investment Consulting Company. Huaneng Group has RMB421.6 billion ($61.6 billion; €43.5 billion) in assets. It is the world’s third-largest power producer in terms of installed capacity.
Huaneng vice president Huang Yongda said in a statement that the partnership would help to “promote industrial development” as well as allow Huaneng to accelerate its development into a “flagship industrial conglomerate with international competitiveness” – suggesting that the venture will invest both in China and abroad.
This is the second joint venture Huaneng Capital Services and Invesco have formed. Invesco was the first US-based fund management company approved to operate a joint venture fund management company in China, when it launched its joint venture with Great Wall Services – Invesco Great Wall Fund Management – in 2003. Great Wall Services is a subsidiary of Huaneng Capital Services. Invesco Great Wall manages around $8 billion in assets.
The two firms have appointed Shen Zhongmin to chief executive officer of the joint venture. Shen is a managing director of China Light and Power, a Hong Kong-listed company.
A spokesman for Invesco WL Ross declined to comment on when the joint venture would raise a formal fund, or how much the two partners would contribute to the fund.
Invesco has been investing in Asia since 1962. It launched its first offshore fund in 1995. In 2006 Invesco won part of the first overseas investment mandate of $1 billion from the National Social Security Fund.
Invesco acquired distressed specialist WL Ross for $345 million in 2006. WL Ross was then folded into Invesco’s private capital arm, which WL Ross founder Wilbur Ross then took control of.