Global private equity firm Warburg Pincus has committed $210 million to be a cornerstone investor in the initial public offering of Chinese brokerage Haitong Securities.
The deal marked one of the largest single investments the firm has made in a Chinese company and the first cornerstone investment it has made in a Chinese financial institution, according to a statement from Warburg Pincus.
Haitong Securities will work with Warburg “in various areas such as corporate governance, financial products innovation, international expansion and growth of our business through new business initiatives both at home and abroad”, according to Wang Kaiguo, executive director and chairman of Haitong.
Haitong’s planned IPO on the Hong Kong stock exchange could raise about $1.7 billion, according to Reuters. Japan’s Chuo Mitsui Trust & Banking Co has also reportedly agreed to be a cornerstone investor.
In June, news reports suggested Haitong was to launch a private equity fund to help overseas expansion of domestic companies targeting RMB10 billion. The status of the fund launch is unclear.
Other firms have also been active with Hong Kong IPOs. MBK Partners alongside insurer Great Eastern Holdings, Malaysian sovereign wealth fund Khazanah Nasional and hedge fund DE Shaw have reportedly pledged to buy a total of $780 million in the Hong Kong listing of New China Life Insurance.
New China Life is raising up to $2.28 billion for Hong Kong-Shanghai IPO, according to The Wall Street Journal.