BIZCHINA / Overseas Investment
After India push, Blackstone sets sights on China
(Reuters)
Updated: 2006-09-26 14:13
The Blackstone Group is exploring possible deals in and around China, a
move that presents a new direction for the buyout firm and follows
similar efforts by its private equity rivals seeking investment
opportunities in the region.
Blackstone deal makers have been travelling throughout China to scope out
the investment turf, sources familiar with the matter told Reuters, a
significant turn for the firm, which had previously hitched its Asian
wagon to India.
Last year, Blackstone set aside US$1 billion for India investing and set
up an office in Mumbai after deciding after much internal discussion that
India was a more attractive near-term play than China.
But China appears to be the firm's new investment frontier, as the
country's huge consumer market and industrial sector has pulled
Blackstone rivals such as Kohlberg Kravis Roberts & Co. and Bain Capital
to the region.
Blackstone, like many global buyout houses, is armed with deep pockets
after raising a US$15.6 billion fund in July.
The New York-based firm opened a fund of funds office in Hong Kong this
year to provide marketing and support for its US$12.4 billion alternative
asset management business, so setting up a buyout group here would not be
logistically difficult.
One banker familiar with the situation said Blackstone was interviewing
investment bankers to potentially set up a private equity group here.
Blackstone declined to comment for this article.
Whether Blackstone's move into China was prompted by India's shaky
markets or simply a push into new, albeit crowded, territory remains
unclear.
Since arriving in Mumbai last year, the firm has made one, US$50 million
investment in an Indian pharmaceuticals firm, a small sum by Blackstone
standards.
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