Riverside seeks Asia fund for Chinese buyouts

The Riverside Co. is raising its first Asia fund to focus on buyout deals in Greater China, a senior executive said last week.

Stewart Kohl, co-CEO of the firm, which is named after the Hudson River in New York, told Reuters that the firm’s first Asia fund would also focus on other Asia-Pacific countries, including South Korea, Japan and Australia.

Kohl declined to comment on the size of the planned fund, but a source familiar with the situation said that Riverside aims to raise about $100 million for its first Asia fund and that the firm had already raised about $30 million.

In the United States, Riverside typically targets companies with an enterprise value under $200 million, but deal size in Asia, a relatively new market for Riverside, could be smaller, Kohl said.

In China, the typical deal size for Riverside would be between $10 million and $30 million, said Kohl, adding that it would not necessarily be a 100% buyout. Riverside was keen to take a controlling stake of 60% to 70% in a local company, he said.

“About four years ago, we started to study the Asia market, which could be the biggest region for our investments someday, although it would take very long time,” Kohl told Reuters on the sidelines of the SuperReturn Asia Conference in Hong Kong.

“We’re definitely not the quickest [private equity] people in the world, but we want to make sure our investments in Asia can be successful,” he said. “Getting rich slowly is our strategy.”

The mid-market investment specialist has already made two deals in Japan and one in South Korea.

In 2008, Riverside invested in Shinsouki, which operates parking lots in Niigata City, Japan. In South Korea, the firm backed Wiz Korea, an educational services provider, which Kohl said aimed to expand out of the Korean market with help from Riverside.

Late last year, Riverside, which Kohl said had made 31 deals worldwide after reviewing about 4,000 investment proposals in 2008, opened an office in Hong Kong. It hired Brian Bunker, former China head of manufacturing company Danaher Corp., as its managing director of Asia to seek deal opportunities in China. —George Chen