Paris, 21st October 2021
Signing of a Memorandum of Understanding between Haixia Capital and LBO France in view of setting up a €500m Franco-Chinese investment program
Paris, 21st October 2021 – As part of their international development strategy, LBO France and Haixia Capital, a subsidiary of China SDIC Gaoxin Industrial Investment Corp. Ltd, one of the five private equity management firms of SDIC, announce the signing of a Memorandum Of Understanding (MoU). Such MoU aims at establishing a long-term partnership between the two entities with, as a first step, the creation of a joint-venture in view of investing €500m in companies with high development potential in China and Europe.
As a pioneer in private equity in France, with a more than 30-year track record and €6.5bn of commitments raised, LBO France thus confirms its ambitions to penetrate the Chinese market by joining with Haixia Capital, the private equity and international investment subsidiary of China SDIC Gaoxin Industrial Investment Corp.Ltd (SDIC Gaoxin). Based mainly in Beijing and Fuzhou, Haixia Capital has been one of the best-known private equity firms in China in recent years (with €6.9bn in assets under management by the end of 2020).
As the EU’s leading country in foreign investments, the world’s fourth-largest exporter of services, and the second-largest EU market, with GDP of €2,303bn in 2020 (source: INSEE), France offers considerable potential for Asian investors. China, meanwhile, is the world’s largest consumer market, with 1.4 billion potential consumers.
It is against this backdrop that LBO France and Haixia Capital have decided to pool their know-how, in order to unlock synergies on their respective markets and strengthen their capacity to spot investment opportunities. The joint-venture arose from this common ambition. In addition, LBO France plans to set up an office in China.
Haixia Capital will gain access to LBO France’s ecosystem with entrepreneurs and investors, which is backed by a 30-year-plus track record on the French market. Through its new partner, LBO France will enjoy special access to an extremely large market and an influential network that will allow it to strengthen its ties with some of its invested companies that have suppliers and/or clients in Asia, and to provide support to European companies that want to make inroads there.
This announcement points to a long-term partnership between Haixia Capital and LBO France. Together, the two partners will be able to explore the growth potential of European and Chinese markets by pooling their respective resources and experience, while setting an example for cross-border cooperation.