Private equity houses in China investment link

THREE major private equity houses have agreed an investment link-up with China Development Bank, a power-house of the Eastern economy.

Permira, KKR and TPG Capital yesterday announced strategic agreements with CDB, which has also launched a foreign investment platform.

Permira will become sole European private equity partner to CDB Capital, the Chinese bank’s asset manager.

Kurt Bjorklund, Permira co-managing partner, said the fund wants to increase its presence in China, where some of its consumer companies, such as Hugo Boss and pay-television technology firm NDS, have grown quickly.

CDB, which is changing from a government-focused bank to a commercial lender, has been stepping up investment in domestic funds as well as in several Sino-foreign funds aimed at facilitating cross-border investment.

The foreign investment platform reflects its desire to become a globally competitive institution, as well as Beijing’s desire to fund overseas expansion by Chinese companies.

“Hong Kong-based CDB International will participate in direct investment and asset management, making use of the CDB brand and government resources to help Chinese companies invest overseas,” CDB said.