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| Quandt's PE unit to invest $300 million in Asia |
| Bloomberg / Jan 06, 2010, 00:29 IST |
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Auda International LP, the $5 billion private-equity unit of Germany’s Quandt family, plans to invest as much as $300 million in Asia over the next three years as it expects deals in the region to pick up.
The fund will allocate 40 per cent of investments in China and 30 per cent in India, and will look to put its money in small- and medium-sized firms where there is less competition and more reasonable valuations, Hong Kong-based Pak-Seng Lai, Auda’s managing director and head of Asia, said today.
China is luring private-equity firms seeking to revive deal-making after the global credit crisis limited debt used for leveraged buyouts. In August, Blackstone Group LP, the world’s biggest buyout company, agreed to set up a 5 billion yuan ($731 million) private-equity fund with the Shanghai government.
“There’s millions of SMEs in China and India and it’s a very fragmented market,” Lai said in a Bloomberg Television interview. “We’re actually focusing on that sector to avoid the competition with the big guys.”
China is among the most attractive places to invest, Carlyle Group co-founder David Rubinstein said in November. The world’s second-largest private-equity investor said in September that it purchased a minority stake in Guangdong Yashili Group Co, a Chinese producer of baby formula.
India had about $3 billion in private-equity transactions last year, according to the Asian Venture Capital Journal. Investments doubled in the second quarter from the first three months of 2008.
Domestic focus
A “big theme” for private-equity firms will be domestically focused companies, rather than export-oriented ones, he added.
“Over the last few years, the export business has been extremely competitive,” said Lai. “Investing money in a contract manufacturer with razor-thin margins is very difficult to generate returns on equity.”
Auda, which invests its money with fund managers, will focus on the health-care, consumer products and green energy industries, said Lai. The largest investors in Auda are members of the Harold Quandt family, cousins to the Quandt family, which owns a majority stake in BMW AG, Germany’s No 3 automaker.
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