Prudential to invest $500m in China partnership

The $750bn financial services company is seeding a China-focused private equity vehicle with Asian private investment house Fosun Group, which last year partnered with Carlyle on an RMB fund.

Prudential Financial, a financial services firm, has entered a partnership with the Fosun Group and agreed to commit $500 million for a China-focused private equity fund.

Fosun, one of the largest privately held investment managers in China, will contribute a further $100 million to the fund and will make the investment decisions, according to a statement.

“We’ve been looking at various partners in China, and Fosun rose to the top,” a spokesperson for Prudential told PEO. China is “one of the biggest and growing markets in the world,” the spokesperson said.

Prudential has other private equity operations. Prudential Capital Group, a division of Prudential Financial, is the sponsor of Prudential Capital Partners, a mezzanine investment firm. Prudential Capital Partners closed its most recent mezzanine fund on $965 million in 2009.   

Prudential is also a limited partner in various private equity funds, though fund investing is not a large part of the company’s business, the spokesperson said.

Fosun, established in 1992, last year partnered with The Carlyle Group to create a $100 million RMB fund domiciled in Shanghai for investments in high-growth businesses. Carlyle’s Asia Growth Capital Group and Fosun each committed $50 million to the fund.

Fosun and Carlyle planned on targeting domestic investors for subsequent RMB vehicles and would look to identify co-investment opportunities. The two groups invested in Guandong Yashili, a Chinese infant formula maker, in September 2009.