The allocation, which may be the largest-ever commitment by a single
entity to a private equity investment fund, is the latest in a series
of moves by China to deploy government-controlled capital into
high-return asset classes. Safe, which oversees the majority of China's
reserves, has now joined its sister sovereign wealth fund China
Investment Corp. in investing some of the country's $1.6 trillion
in reserves into
private equity and hedge funds.
CIC is in discussions with eight foreign firms to manage fixed-income
funds ranging from $250 million to $600 million, and in advanced talks
with JC Flowers & Co. LLC to manage a $4 billion private equity fund
for the sovereign wealth fund. Additionally, China's pension fund the
National Council for Social Security Fund placed 2 billion yuan ($289
million) with domestic buyout shops CDH Investments and Hony Capital
this week.
The TPG fund has an estimated $17 billion under management in the
vehicle, which has not yet closed, according to the FT. Through its affiliate Newbridge
Capital, TPG has been one of the longest-standing foreign private
equity investors in China, but the firm has been stepping up its presence in
China even more in recent months. In September 2007, TPG hired
local star Mary Ma,
the former CFO of Lenovo Group Ltd., as a partner, managing director
and the firm's China ambassador.
- George White
See Financial Times story
See Dealscape post China Investment Corporation
See profile of Mary Ma on TheDeal.com
