Public RelationsQuandt's PE unit to invest $300 million in Asia
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.
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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.