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PE firm opens first mainland subsidiary

EUROPE'S largest private equity firm, Apax Partners, yesterday launched its first Chinese mainland subsidiary, in Shanghai.

The firm, which oversees about US$40 billion, has US$10 billion to invest in the next two to three years, and it expects a large part of the fund will be used in China.

"We will devote our efforts to form a multi-level capital market to help Shanghai build itself into an international financial center," said Richard Zhang, head of Apax China.

"Our targets also include helping companies with strong potential develop into global leaders and attracting high-end asset-management companies to Shanghai," Zhang said.

Shanghai Vice Mayor Tu Guangshao attended yesterday's opening ceremony and said speeding up the development of private equity investment is part of the city's efforts to set up an asset-management center for its financial center.

Apax's move bucked the gloomy VC and PE investment environment. Venture capital and private equity firms raised US$500 million from the Chinese mainland in the first quarter of this year, a fall of 97.1 percent from a year earlier, the Zero2IPO Research Center said in a report.

In the first three months, these firms invested in 19 cases on the mainland, 22 fewer than a year earlier, with investments totaling US$470 million, slumping 82.5 percent, Zero2IPO said.

The financial crisis has forced investors to reduce, delay or even suspend investment in rising markets such as China, the report said.

Ten companies from traditional industries, such as energy and consumption, absorbed US$389 million, accounting for 82.7 percent of total investments.

The rest went to the service industry, information technology, clean technology and health industries.


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