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China's CDB partners with private equity

by Jonathan Braude  |  Published December 6, 2011 at 10:56 AM
ChinaDevBank_227x128.jpgChinese state lender China Development Bank Corp. on Tuesday, Dec. 6, unveiled strategic partnerships with U.S. private equity firms Kohlberg Kravis Roberts & Co. LP and TPG Capital and their London peer, Permira, as it seeks to help Chinese companies invest abroad and help open the domestic market to further foreign investment.

The new partnerships will operate through CDB's newly established Hong Kong subsidiary, China Development Bank Capital Co. Ltd., which has reportedly also signed up to a strategic partnership with Hong Kong-listed property outfit New World Development Co. Ltd.

The announcement, reported by Dow Jones, follows the parent bank's agreement last May to acquire a small stake in TPG, with the express intention of establishing a partnership with the Fort Worth, Texas, firm and "enhancing its capabilities in direct investment."

Commenting ahead of the other private equity firms Tuesday, Permira said the memorandum of understanding it signed with the Beijing lender made it CDB's sole European private equity partner. In a statement, Permira co-managing partner Kurt Björklund said the MOU would "provide the Permira funds with excellent access to investment opportunities in China."

Permira said: "It will enable the two parties to work together on pursuing private equity investment opportunities in China as well as overseas in businesses looking to expand in China. Together, Permira and CDB Capital also aim to support Chinese firms as they look to expand in Europe. This partnership will also deepen Permira's ability to source deals for its existing global portfolio companies who are seeking to invest and expand further in China."

Established in 2009, CDB Capital is responsible for investments in equity sectors, sourcing domestic and international deals for the group.

CDB's alliance with the three buyout firms comes just one day after New York-based KKR agreed to invest $60 million into China Outfitters Holdings Ltd., as a cornerstone investor in the Hong Kong firm's $145 million initial public offering. The other cornerstone investors were Everbright Private Equity and Sequoia Capital, with $25 million apiece.



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Tags: China Development Bank Corp. | Kohlberg Kravis Roberts & Co. LP | PErmira | Private Equity | TPG Capital

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