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DBS fund to invest in unlisted companies

SINGAPORE'S DBS Bank said yesterday that its private equity arm has established a US$100-million onshore yuan-backed fund to invest in unlisted companies in China.

DBS Private Equity is among the first few foreign private equity investor groups to set up a local investment vehicle on Chinese mainland.

"The initiative reinforces DBS's commitment to expand its franchise in the country, and underscores the bank's conviction in the strength and potential of the Chinese economy," Southeast Asia's biggest bank said.

The DBS Private Equity Enterprise fund is wholly owned by the bank. The fund will provide capital to mid-to-late stage Chinese firms in growth industries, and to eventually list them on the domestic A-share market.

Over the next two years to three years, the fund will invest US$10 million to US$20 million on average in each company to own minority stakes in them.

"China is an important growth market for DBS, and we believe in its long-term potential," said Melvin Teo, managing director and head of DBS Private Equity. "We are staying the course in Asia, and the creation of the fund allows us to partner promising Chinese mainland companies to create long-term value for the Chinese economy."

DBS's private equity arm will open a Shanghai office to further expand its investments in China. DBS Private Equity made its first investment in China in 2002 when it invested in Yingli Green Energy Holding Co Ltd, Yangzijiang Shipbuilding (Holdings) Ltd and China Infrastructure Machinery Holdings Ltd.


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