Ion network
Updated: 2007-07-24 11:47
3i is a leading private equity business with a history of 62 years. Established in 1945 with funding from the Bank of England, UK clearing banks and the City, seasoned entrepreneur William Piercy (later Lord Piercy) was appointed to manage the initial fund. 3i Group listed in London in 1994 and remains the only FTSE 100 Private Equity business, with five different asset classes and $14.3 billion under management.
The company has invested over $250 million in many well-known Chinese companies, such as: Focus Media, Chinas largest multi-channel advertising media company; D.Phone, one of China's earliest mobile phone retailers; PCD, established by Ports CEO, a high-end department store; and Inner Mongolia Little Sheep Catering Chain Co, China's leading retail hotpot restaurant chain.
3i is currently invested in more than 500 businesses worldwide. At least 60 of these businesses operate in Asia, of which more than 35 are in China.
In an exclusive interview, China Business Weekly reporter Zhang Ran speaks to Lily Jin, chief representative of 3i's Beijing office.
Jin was voted the best venture capitalist in 2006 by Forbes for her investments in Mengniu Dairy and Suntech Power.
Q: What was the situation when 3i came to China in 2001? Have circumstances for foreign private equity investments in China changed over the past six years?
A: 3i came to China when there were few other competitors operating in the market and private equity was not yet a buzzword. Successful listings of companies such as Focus Media and Mengniu Dairy, and increasing numbers of high-quality Chinese companies have delivered great results and expanded very quickly. Therefore, more and more international investors are flooding into the market.
Over the past three to four years, with proven high returns for overseas listings, the number of funds in the market has risen significantly. This is making China a competitive place to make investments. With so much capital in the market, Chinese companies are no longer interested in how much money you have, but rather the strategic advantages that you can bring to the table.
Q: How many deals is 3i likely to make this year? And what is the average investment amount?
A: We recently closed our first onshore investment, investing around $35 million. We are focused on other high-growth, traditional sectors such as branded consumer products (which includes retail and food products), oil, gas and renewable energy, and affordable real estate. We will probably look to invest in four to five Chinese companies this year, investing close to $200 million in total.
Q: Which sectors in China offer the greatest opportunity?
A: Globally we focus on high-growth sectors where we have the most experience and resources. There are great opportunities in a number of sectors in China. China has a large domestic market with a population that has increasing disposable income, making consumer-related goods and services a good area for investment. Likewise, with an average GDP growth rate of 9 percent, China's energy demands fit well with 3i's experience in the oil, gas and renewable sector.
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