Safety First: Investing in China’s Food Supply Chain
Driven by rising disposable incomes and lower confidence in food safety, Chinese consumers are willing to pay a premium for quality. PE firms have identified the opportunity, but taking it can be difficult. Fifteen years ago, Charles Shao left his career as a technology investor in the US and returned to China to set up […]
For Private Equity, Door to Deals Opens in China
Private-equity investors, long shut out from getting controlling stakes in Chinese companies, are beginning to find mainland entrepreneurs increasingly amenable to outside help. These “first-generation entrepreneurs” — people who took advantage of the liberalization of China’s economy starting in the late 1970s — began their operations on a small scale, with modest amounts of capital. […]
Change Afoot for Investors in China’s Retail Sector
As the economy slows and midtier brands lose favor with consumers who are switching to premium brands and to shopping online, China's retail sector is changing. The result is that private-equity firms that once bet on sky-high consumer growth are now buying into restructuring situations or into companies that cater to more-sophisticated tastes. “Going from […]
Silver Linings in the Clouds Hanging Over the IPO Market
We believe there is a silver lining to the cloud hanging over the initial public offering malaise. Positive side effects include far more rational expectations of shareholders and entrepreneurs, and a corresponding increase in mergers and acquisitions. We believe this is a further signal that control and value creation will be rewarded. Growing Pains The […]
Despite Scandals, PE Still Has Appetite for Chinese Food and Beverage Deals
Investors in China are literally putting their money where their mouths are. Capital invested by financial sponsors in China’s food and beverage sector rose by almost 10% last year, as the industry continues to consolidate and demand for higher quality goods prompts a need for stronger company operations. Although other sub-sectors catering to Chinese consumers, […]
Asia Private Equity Weekly News, April 29, 2013
HONG KONG, Apr 29 (Reuters) – News and developments in Asia private equity from Reuters News for the week ending April 26. TPG CAPITAL is putting China's UniTrust Finance & Leasing Corp up for sale, seeking $800 million, and has hired Morgan Stanley and UBS to handle the deal, people with knowledge of the matter […]
Lunar Invests in Chinese Beef Snack Company
Shanghai private equity firm Lunar Capital has bought a majority stake of about 70% in Chinese snack food maker Guizhou Yonghong Food Co., committing up to $50 million to the company. The deal represents one of a handful of Chinese buyouts in a market where private equity investors typically take minority shareholdings in portfolio companies. […]
Private Enterprises and Debt Markets in China
One of the biggest challenges for small- and medium-sized private enterprises in China is debt financing. A recent study conducted by Development Research Center under the State Council showed that while 66.7% of the SME see bank loans as the primary source of financing, more than 62% of the SMEs are unable to acquire them, […]
Two Meetings, One Goal: Rebalancing Toward a Richer Consumer
In China’s recent Liang Hui — the annual meetings of the National People’s Congress and Chinese People’s Political Consultative Conference — raising the size and living standards of the middle class were the primary policy objectives. China believes the answer is to urbanize, raise disposable income, and widen the social security net. These new policies […]
Investment Snapshot: China’s Dairy Industry
Given the increase in food safety awareness, China’s dairy sector has attracted renewed interest as the reality takes hold that scandals will push consumers toward buying products from larger, branded players. In seeking out attractive consumer businesses, we have looked at a number of dairy companies. Many have had challenging histories. Consumer spending patterns for […]
