After India push, Blackstone sets sights on China
(Reuters)
Updated: 2006-09-26 14:13 Meanwhile, the buyout money is flowing into China. Private equity firms have
raised US$1.7 billion for China investments so far this year, four times the
amount raised in the first nine months of 2004, according to the Asia Venture
Capital Journal.
Buyout firms have invested more than $4 billion in China this year,
compared with only US$723 million in 2003, according to market data firm
Dealogic.
But while China's nearly 10 percent economic growth and increasing domestic
consumption make for tempting opportunities, regulatory constraints and
underdeveloped capital markets make it difficult to put that money to work.
Carlyle Group in October announced a deal to pay US$375 million for 85
percent of Xugong Construction Machinery Group, China's biggest construction
gear maker.
The deal has hit snags as Beijing has tightened controls on foreign
investments, including stakes in domestic equipment makers, highlighting the
market's regulatory risks.
Both Blackstone and KKR expanded into Asia for the first time ever last year,
an arrival that came long after Carlyle, Texas Pacific and Warburg Pincus
established investment teams in the region.
KKR chose to set up shop in Hong Kong and has already made deals in
Australia, Singapore and India.
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