Templeton EM fund in China deal

The global asset manager has acquired Tongda Group, a plastic moulding firm using capital from its latest $300m emerging markets fund.

The private equity arm of Franklin Templeton has acquired a 6.3 percent stake in China-based Tongda Group, according to a statement. The firm purchased a total of 300 million shares of the business for an undisclosed sum.

Tongda makes plastic lamination moulds for decorative components of computers, household electronics and other electrical products, the firm said. The business has sustained a minimum dividend payout policy at around 25 to 30 percent, it added. 

Mark Mobius, executive chairman of Templeton Asset Management, said: “Considering the huge and growing Chinese handset market, as well as increased penetration of Chinese brands in global markets, we are very positive on the potential growth in Tongda’s business in the coming years, and hope that our support will enable the company to reach new heights.”

Templeton made the Tongda investment from its fourth emerging markets fund, which it launched in March, according to the firm. The $300 million vehicle will have a “sub-tranche” for Asia: this will make up two thirds of the entire fund, and will be split equally between China, India and Southeast Asia. The fund will also address other emerging markets, namely Central and Eastern Europe.

The firm, which could not be reached for further comment by press time, had raised $100 million for the fund as of March 2012.