London Asia, the investment bank listed on London’s Alternative Investment Market, has joined forces with Global Emerging Markets (GEM), the New York-based investment group, to launch a new $200 million private equity fund focused on China.
The fund will focus on later-stage investments in mid-market companies in the Greater China region, including China, Taiwan, Hong Kong and Southeast Asia.
In a statement, the firms said the fund would take “significant” stakes in each acquisition, would seek board representation and would be actively involved in strategic direction, financing and acquisition strategies.
The statement said investors in the fund would come “primarily through GEM’s network of contacts and existing investors, many of which are seeking an exposure to Chinese investments”.
The fund will be jointly managed. GEM will take responsibility for all technical, legal and compliance operations, while London Asia will use its offices and network in Greater China to identify opportunities, manage the investments and assist in the exit of portfolio companies, particularly on UK and Asian markets.
“Establishing the fund is in line with our strategy of generating income from a wider range of sources without significant investment of our own capital,” said Simon Littlewood, London Asia chief executive. “The fund will enable us to invest in the larger transactions which we have access to, especially in the power and environmental sectors, but are currently unable to invest in without substantial dilution to our shareholders.”
Based in London, London Asia has offices in New York, Singapore, Hong Kong and Taiwan. Through its alliances with a number of Chinese business parks, London Asia says it has access to over 7,000 Chinese businesses with a demand for capital and financial advisory services. The firm invests in profitable businesses and provides corporate finance advisory services in areas such as fundraisings, IPOs, M&A and fund management.
New York-based GEM was founded in 1993 and has offices in London and Paris. With $1.8 billion under management, it is a private investment group specialising in control, minority and public market investing on an international basis and in a wide range of industries. As at June 30 2004, it had invested in more than 40 companies worldwide.