NY fund, AsiaInfo investments raise Citic's global profile
Citic Capital's investment in a new New York fund and its lead role in the buyout of AsiaInfo mark its rise as a major global investor, part of a broader move by Chinese private equity
The growing field of big Chinese global investors has gained a new member, with word that a unit of Citic Group, one of the nation's oldest conglomerates, is taking a stake in a major new fund being set up in New York. Word of that deal comes as Citic Capital wraps up another major deal, as it finally closes its long and difficult plan to buy out New York-listed telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA). Both deals underscore not only Citic's own aspirations as a global investor, but also the broader rise of Chinese private equity firms on the world stage as they aim to compete with big western names like KKR and Carlyle.
A report on the new tie-up didn't specify how much Citic Capital would invest, or what exactly the new fund will do. Given the background of the fund's managers and the size of Citic Capital's total assets, which total about $4 billion, I would expect the new fund will probably be another hedge fund and that Citic's investment could be around $300-$500 million. I don't know enough about the new venture's partners to comment on chances of success for the fund, but would say the investment looks like a relatively shrewd one if it takes the form I've described above.
I won't write more about the deal here, as I've written far too much about it already due to its numerous twists and turns as rumors swirled of insider dealing. AsiaInfo is one of China's oldest US-listed firms, but saw its shares neglected in recent years amid a broader loss of interest in Chinese tech firms by foreign investors. Following closure of the buy-out, AsiaInfo said it has applied to the Nasdaq to have its shares de-listed, and I expect we could see the stock disappear by the end of this month.
From a broader perspective, Citic Capital's AsiaInfo buyout and participation in this new New York fund represent the company's growing aspirations as a global investor. The company is just one of several such investors to emerge from China in recent years. Other big names in the emerging field include HNA Group, Fosun International (0656.HK) and Hony Capital, whose sister companies include PC giant Lenovo (0992.HK).
Bottom line: Citic Capital's investment in a new New York fund and its lead role in the buyout of AsiaInfo mark its rise as a major global investor, part of a broader move by Chinese private equity.
