- Will focus on investing in growing and profitable mid-cap companies in China’s Greater Bay Area
Bahrain – Global alternative asset manager, Investcorp, will join forces with Fung Capital (“Fung”), the private equity investment arm of Fung Investments, the Hong Kong headquartered private investment office of the families of Dr Victor Fung and Dr William Fung, to invest in mid-cap companies across China’s Greater Bay Area (“GBA”) encompassing the Guangdong Province and the two Special Administrative Regions of Hong Kong and Macau. The GBA boasts a large number of innovative, growing and profitable private enterprises and present a highly attractive investment destination. It is currently expected that – once established - the fund will be operated out of Hong Kong.
The upcoming $500m fund was announced in Riyadh on the first day of Saudi Arabia’s flagship Future Investment Initiative. The fund will represent the fourth venture between Investcorp and Fung combining Investcorp’s 40 years of global private equity investing and operational value creation expertise with Fung’s more than 115 years of successful commercial history connecting Asia with the rest of the world through trade.
The fund will engage in privately-negotiated equity or equity-linked investments in growing and profitable companies based in or with nexus to the GBA. While being sector-agnostic, the fund will primarily focus on control buyouts of mid-cap enterprises with proven profitability and strong growth potential.
“We are proud to announce this new fund on the first day of FII with our partners Fung Capital, which is part of the Fung Group that has over a century of operating expertise in China and a strong GBA ecosystem. The GBA is a globally competitive industrial and technology cluster and there are strong fundamentals that single out the GBA ecosystem. There is big potential, particularly, for GBA-centered mid-cap companies with innovative products and services targeting Asian but also global customers to be grown into significantly larger players,” said Mohammed Alardhi, Investcorp’s Executive Chairman. “GBA’s role as one of the main economic engines of China has never been more important as the country looks to rebalance its economy towards a consumption and innovation driven model, and the GBA offers enormous investment potential.”
“Our differentiator is that our fund is buy-out focused and we believe there is huge scope for strong returns,” said Investcorp’s Co-CEO Hazem Ben-Gacem. “The GBA’s business ecosystem includes one of the globally leading capital markets, Hong Kong, China’s leading technology and innovation hub, Shenzhen, a plethora of world-class manufacturing and R&D city clusters all efficiently linked together by high-speed train and to the world through leading airports and container ports. This is underpinned by the continuous influx of a highly educated and skilled workforce and in combination has created big success stories such as Tencent, ByteDance, BYD and Mindray.”
Kevin Lam, Managing Partner of Investcorp Fung GBA Fund said, “we are very pleased to again join forces with Investcorp to invest in businesses meeting the unique needs and aspirations of Millennials and Gen Zers across China and the world. Hong Kong is strategically located for investors to access the fast growing consumer markets in the Greater Bay Area and as a bridge between China and the World. Investcorp brings a strong global alternatives investment platform and brings its unique Middle East heritage and understanding of these emerging markets.”
Comparative data supports the scope for greater growth in the region. Per Capita GDP in China’s GBA is currently around USD $22,501, which is still a fraction of other globally leading bay areas such as Tokyo (USD 45,084), New York (USD 78,586) or San Francisco (USD $128,573). With a population larger than Germany and an economy already surpassing that of Canada, China’s GBA region attracts tens of thousands of highly educated and skilled people each year and puts the region on a sustainable track to close the gap to the other world leading bay areas.
Investcorp is a global investment manager, specializing in alternative investments across private equity, real estate, credit, absolute return strategies, GP stakes, infrastructure and insurance asset management. Since our inception in 1982, we have focused on generating attractive returns for our clients while creating long-term value in our investee companies and for our shareholders as a prudent and responsible investor.
We invest a meaningful portion of our own capital in products we offer to our clients, ensuring that our interests are aligned with our stakeholders, including the communities that we operate within, towards driving sustainable value creation. We take pride in partnering with our clients to deliver tailored solutions for their needs, utilizing a disciplined investment process, employing world-class talent and combining the resources of a global institution with an innovative, entrepreneurial approach. In January 2022, Investcorp issued its 2021 Responsible Business Report which outlines its Environmental, Social, and Governance (ESG) highlights for 2021 and specific initiatives the Firm implemented to meet its goals: https://www.investcorp.com/esg/.
Investcorp has today 13 offices across the US, Europe, GCC and Asia, including India, China and Singapore. As of June 30, 2022, Investcorp Group had US $42.7 billion in total AUM, including assets managed by third party managers, and employed over 480 people from 50 nationalities globally across its offices.
For further information, visit www.investcorp.com and follow us @Investcorp on LinkedIn, Twitter and Instagram.
About Fung Capital
Fung Capital is the private equity investment arm of Fung Investments, the Hong Kong headquartered private investment office of the families of Dr Victor Fung and Dr William Fung. It is also a sister company of the Fung Group in Hong Kong. The Fung Group has a rich history and heritage in import and export trading that dates back to the founding of the family firm Li & Fung in Guangzhou, in 1906, and its Hong Kong office in 1937. Through its pioneering role in global supply chain management, the Fung Group is an integral part of the story of how Hong Kong and the Pearl River Delta emerged as one of the world’s foremost manufacturing and trading regions, and continues to evolve as the Greater Bay Area. It has over 25 years of intellectual research on GBA development and competitiveness and in 2021, a Fung Group entity obtained the first and only nation-wide supply chain financing license issued in Hengqin by the Guangdong Financial Supervision and Administration Bureau.