Foreign PE China "Feast" has become the past and it is raised in RMB fund raising (VC290)

Carlyle Group LP's reduction of its shareholding in China Pacific Insurance (Group) Co., Ltd. tells us that although it has written one of the most successful chapters of foreign private equity investment in China and is lucrative, the glory days of this industry Perhaps it is a thing of the past.
After the end of the lock-up period last week, Carlyle non-publicly placed 215 million shares of CPIC, cashing in US $ 860 million. Based on the stock price of HK $ 32.30 (US $ 4.15) on December 31, the remaining 47% of Carlyle ’s CPIC H shares are currently valued at US $ 4.6 billion, which is about six times the initial return on investment.
As Carlyle gradually reduces its holdings, thereby eliminating the share price dilution concerns that underpin CPIC's stock price, the return on this group of shares may rise. (Including A shares and H shares, Carlyle still holds 12.9% of CPIC; the pre-allotment shareholding ratio is 15.4%.) But Carlyle reduces its holding of China ’s third-ranked life insurance company, which may be foreign The last big deal of private equity in China. Another big deal was the acquisition of a 17% stake in Shenzhen Development Bank Co., Ltd. by TPG, which was sold in 2010 with a return on investment of more than 16 times.
In 2008, Carlyle gave up the acquisition of the Chinese construction equipment manufacturer XCMG because of no government approval, which caused a sensation. Although it agreed to buy only a few minority stakes instead of the 85% originally expected, it was still not approved. Carlyle ’s investment interest has caused a rebound in China, and it is believed that industry leaders with a strategically important position such as XCMG should not fall into the hands of foreigners. Since then, China has actively nurtured the domestic private equity industry to compete with foreign private equity.
At present, the future of foreign private equity is in the fundraising of RMB funds, and they expect to obtain a wider channel from which to expand the scope of investment. But since Carlyle made the first of two investments in CPIC in 2005, the size of the transaction has been significantly reduced. (According to a person familiar with the matter, the total amount of that investment ultimately was approximately $ 740 million.)
A more typical transaction is the joint investment of Carlyle and Fosun Group, a Shanghai-based conglomerate group Fosun Group, in the US $ 100 million investment of Chinese baby food manufacturer Guangdong Yashili Group Co., Ltd. in September 2009 and Carlyle ’s Chinese restaurant chain DIOF & BGroup has invested 21 million US dollars. In June 2010, Carlyle said it invested US $ 140 million in four Asian companies, including China, ATMU Inc., China ’s largest independent ATM deployment company. Carlyle did not disclose how much money was spent on the investment.
Only if the growth of profits is stable enough, foreign private equity is expected to prove that in China, the world's largest emerging market, they can still make small strides.
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