ISG Preps Maiden China-Focused Private Equity Fund

Apr 3 2007 | 12:26pm ET

Investment advisory firm International Strategic Group is prepping to launch its maiden private equity fund, the China-focused China Expansion Fund-I. The New York and Shanghai-based firm will begin marketing its new offering within the next two months and is aiming to raise $200 million.

The fund will invest between $10 million to $30 million in established private companies that are at the expansion stage, according to Andrew Strott, managing partner and head of U.S. operations.

“There is tremendous deal flow and from our perspective we’re seeing everything from industrial real estate to manufacturing and healthcare services companies,” says Strott. “We won’t look at companies in high-profile industries like telecom. We tend to focus on industries away from the limelight.”

The new offering is managed by a local team based in Shanghai, which Strott says gives it a leg up when dealing with entrenched management teams leery of foreign investors.

“Foreign investors in China are having a very hard time talking to Chinese management teams and executing deals. Family run businesses are a little more reluctant to accept foreign capital but they see us as a local investment firm providing capital that’s needed,” says Strott.

Strott adds that the firm wants raise more China-focused funds, specifically a real estate fund, but there are no immediate plans for that venture.   

Li Li, the former head of futures brokerage firm Zhenxin International Futures Corporation, founded International Strategic Group in 2002.

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