Permira, a private equity firm, has hired Alan Chen from Goldman Sachs as head of China, and Christian Paul from Alix Partners as portfolio director. Both are newly created roles, a Permira spokesperson clarified.
Earlier this year, Permira appointed Henry Chen and Alex Emery as co-heads of Asia with the mandate to grow the business of the buyout fund across the region and specifically in Greater China, Korea and Japan. It also moved its regional headquarters from Tokyo to Hong Kong, while continuing to maintain a satellite office in Tokyo.
Permira set up shop in Asia in Tokyo in 2005. It took two years to source and close its first deal, an $840 million investment for a 20% stake in Macau gaming and hotel business, Galaxy Entertainment. Soon thereafter Permira emerged the winner in an auction for Tokyo-based agrochemicals business, Arysta, with a $2.2 billion bid, Japan’s largest buyout deal at the time. Permira made its third Asia investment last year in Hong Kong headquartered satellite business Asia Broadcast Satellite.
“With significant capital already successfully deployed across the region, we see strong appetite in China to create partnerships with entrepreneurs and families to help them accelerate the growth of their businesses,” said Emery and Henry Chen in a written statement. The spokesperson further clarified that, in China, Permira will primarily seek partnership opportunities where it can contribute meaningfully to the development of the investee company with appropriate governance rights, similar to the Galaxy deal.
Alex Chen spent nine years at Goldman Sachs, most recently as an executive director in the Asian special situations group. He previously worked in Goldman’s corporate finance group within investment banking and has also worked at HSBC. Henry Chen is also ex-Goldman and was co-head of the general industrials group for Asia ex-Japan when Permira poached him in 2008.
Paul was a director at Alix Partners in Shanghai for four years and has also worked at KPMG in Berlin, as well as Roland Berger in both Berlin and Beijing. The new hires take the total number of investment professionals Permira has in Asia to 14. Of these, six are native Mandarin speakers who spend significant time in China.
Earlier this week, private equity firms KKR and Carlyle announced investments in China. KKR is investing $114 million for a 38% stake in United Envirotech, a provider of engineering services to municipal and industrial waste-water treatment projects. Carlyle will pay up to $194 million for convertible bonds and warrants in white-goods company Haier for an ultimate 9% equity stake. Both investments are telling of the problems private equity is facing in Asia in general and China specifically — it is not easy to find the big-ticket private equity deals big financial sponsors are used to in Western markets. Similarly, it is not easy to find control deals and minority stakes are far more common.