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FountainVest raises $1 bln China fund, Temasek helps

  FountainVest Partners, backed by Singapore’s Temasek Holdings, said on Thursday that it had raised nearly $1 billion for its first China-focused private equity fund despite the global financial market turmoil.

 

FountainVest, whose top management team includes four former senior Temasek executives, aims to complete 15 to 20 investments in China in the next four to five years, a statement said. It will target investments between $50 million and $150 million for each deal and focus on emerging industry leaders who can benefit from China’s transformation in terms of consumption, urbanization and sustainable development.

“Despite the global economic downturn, we are optimistic about China’s long-term growth prospects,” Frank Tang, co-founder and chief executive of FountainVest, was quoted as saying. “We believe that the investment opportunities in China have just begun to emerge. The transformation of consumption in China will be the driving force for growth in the coming decades,” said Tang, who was a senior managing director at Temasek, a sovereign wealth fund.

The other co-founders of FountainVest include Terry Hu, former managing director and head of global real estate investments at Temasek, and George Chuang and Chenning Zhao, who both worked for Temasek (Hong Kong) as its managing directors. Major investors of FountainVest include Temasek, Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan, the statement said.

While China’s economic growth has cooled amid the worst US financial crisis since the Great Depression, it is still growing faster than any other major economy, with plenty of capital-hungry entrepreneurs looking to fund projects.

FountainVest will join the fierce competition for China deals with global private equity heavyweights, such as Carlyle Group and Blackstone Group LP, which have done multi-billion dollar deals in the past few years. “FountainVest is focused on China, and committed to building the future champions in China and globally by establishing solid partnerships with Chinese entrepreneurs,” said Tang, who was also formerly head of China investment at Temasek. (Reuters)