H&Q Asia Pacific
announced last week that it will invest $45 million to obtain more than 43% ownership of China’s Yuchai Engineering Machinery Co., which it plans to help expand. Yuchai is one of China’s largest diesel engine makers with annual sales of more than $1.5 billion.
“The United States and Europe are the two markets for Yuchai to focus on. The Middle East is another one they are looking at,” said Andrew Kuo, head of greater China for H&Q Asia
H&Q, which recently sold a 90% stake in the operator of 60 Starbucks Corp. stores in China, will take three of Yuchai Engineering’s nine board seats, with Kuo serving as vice chairman.
H&Q Chairman Ta-lin Hsu said the deal took less than six months to complete and has received all government regulatory approval. This is in contrast to what The Carlyle Group has experienced over the last two years as it continues to struggle to buy a stake in Xugong Group Construction Machinery Co.
The difference is that H&Q Asia is taking a less than majority stake, whereas Carlyle announced it was going to buy 85% of Xugong for $375 million. The buyout shop has recently agreed to scale back its acquisition to a 50% stake after the deal faced regulatory opposition regarding foreign majority ownership.
In China, H&Q Asia typically invests in branded products, manufacturing/basic industry, and financial services.
Jade Alternative Investment Advisors
has launched marketing efforts to raise $150 million for a private equity fund-of-funds dedicated to mainland China. A spokesman for the Shanghai-based firm says that a first close of at least $50 million is expected in January.
The Jade China Value Partners fund is sponsored by the Kuwait China Investment Co., a subsidiary of the Kuwait Investment Authority and the National Investment Co., and which has committed $15 million to the fund.
The fund-of-funds focuses on growth and expansion oriented funds and also co-investments. The vehicle will invest in up to 12 funds.
The fund’s general partners are Ludvig Nilsson, a former PricewaterhouseCoopers strategy consultant in London; Larry Ma, former director of PricewaterhouseCoopers’ China and Hong Kong transactions group in Shanghai; and Jenny Zeng, co-founder and previous executive director of the China Venture Capital Association.
Nilsson says that the fund’s focus on mainland China is an important differentiator. “Local access is key and many of our investors have found it difficult to overcome cultural and language barriers on their own,” he said.
The fund has already begun investing and recently made a commitment of an undisclosed amount in CDH, a private equity firm in China.
, a Taipai, Taiwan-based communications hardware manufacturer, has raised nearly $6 million of a $7.81 million early stage round, according to a regulatory filing. Backers include Redwood Ventures and Edelson Ventures.
United Information Technology Ltd.
, a Beijing-based provider of IT management and storage solutions in China, has raised $10.5 million in private equity funding from Orchid Asia Group Management. —PE Week staff