China Investment Corp, the country’s sovereign wealth fund, may invest up to €800m in British private equity firm Apax Partners, the Financial Times reported on Thursday.
The deal will be unusually structured, with Apax giving its investors the option of transferring yet-to-be-invested funds to CIC, the paper reported. CIC will go ahead with the deal so long as it receives at least €350m of these unfunded commitments.
Such a swap could entice investors who lack cash and are trying to reduce their exposure to private equity funds.
The FT did not indicate its sources. Calls to CIC went unanswered.
The report added that CIC may also buy a 2.3% stake in Apax Partners LLP, the private equity group’s management company.
The US$300bn Chinese fund has been on an investment spree this year, concentrating mainly on the energy and commodities sectors after high-profile financial sector investments in Blackstone and Morgan Stanley left it with deep paper losses when the global financial crisis struck.