PRIME NEWS@INSTAFOREX Source: mt5/ HUARONG RECEIVES $700 MILLION INVESTMENT FROM WARBURG PINCUS Buyout firm Warburg Pincus LLC is set to invest almost $700 million in China’s Huarong Asset Management Co., according to people familiar with the issue. Under the terms of the deal, Warburg Pincus acquired the largest chunk of a 21% ownership stake in Huarong, China’s largest manager of bad loans, which was sold to various investors including Goldman Sachs Group Inc, China Life Insurance, and Khazanah Nasional Bhd. in Malaysia, for around $2.4 billion. The transaction reflects the growing opportunities being given to asset management firms in the East Asian country as the number of loan delinquencies pile up. Analyst Ming Tan from Jefferies LLC in Hong Kong says that, “Huarong is attracting interest because it is one of the largest AMCs in China. It’s getting rarer to find such large deals to invest in, especially at a pre-IPO stage where the valuation is more attractive and there’s a clear exit timing.” Bloomberg data shows that private equity firms from overseas have been involved in deals in 2014 with a total worth eight times more than last year at $10.9 billion. The deal is the largest in the history of China’s financial sector when it comes to investments from foreign buyout companies. Carlyle Group LP was the previous record holder since 2005 when it purchased a stake in China Pacific Insurance Group Co. for $410 million. In a statement, Warburg Pincus explained the benefits of the transaction by saying that Huarong provides them a low cost solid foundation for stable profit growth due to its highly diverse channels in financial markets and a strong debt structure.
Posted on: Wed, 03 Sep 2014 06:30:08 +0000
Trending Topics
Recently Viewed Topics
© 2015