Bain Capital keeps a cool head, takes long view on China fintech and education sectors
US private equity firm sees attractive opportunities in payments and software, and will be long-term investor in education
Bain Capital Private Equity has identified attractive, minority investment opportunities in China’s financial technology sector where it can add value, managing director Drew Chen told the South China Morning Post in Hong Kong.
And, despite mounting pressure on managers to put money to work amid record high investor “dry powder”, or pledged but uninvested capital, the pay-off for investing with discipline and patience was still attractive, said Chen, who oversees the US buyout company’s technology, media and telecoms investment division based in the city.
Education … requires a longer-term ownership horizon and patient capital
For instance, Bain Capital this month partially exited its 22.45 per cent stake in Huifu Payment, a Chinese third-party payment service provider that works with small and micro merchants, through an initial public offering and listing on the Hong Kong stock exchange.
Chen said Bain Capital invested in Huifu Payment three years ago, as he saw the company was operating in a niche not actively covered by the two dominant players, Alipay and WeChat Pay, the respective mobile payment arms of Ant Financial and Tencent Holdings. Ant Financial is an affiliate of Alibaba Group Holding, which owns the Post.
“The dominant internet payment operators are more focused on servicing the consumer side, whereas Huifu Payment’s services target the small to medium businesses in China. It has also pioneered fintech enabling services targeting specific industries, such as airlines and internet finance companies,” said Chen.