Squadron, SHK Plan Asia Offerings

Apr 9 2008 | 7:13am ET

A pair of Hong Kong-based alternative investment firms announced plans to expand their offerings in Asia at an industry summit yesterday.

Squadron Capital said it would launch a US$400 million private equity fund of funds in May, while SHK Fund Management revealed that it plans to expand to China, Vietnam and the Middle East.

Speaking at the Reuters Hedge Fund and Private Equity Summit in Hong Kong, Squadron CEO David Pierce said his firm’s new vehicle would target India and China, aiming for returns in excess of 20%.

“Our growth capital managers in both places are looking at the consumer story very hard,” he said. “There are a lot of players relative to the past, people know what these themes are and what can be done, but it comes down to who has the ability to source and execute transactions.”

Pierce added that Squadron has seen increased interest among institutional investors for Asian private equity products.

“As a percentage of total portfolios, allocations to Asia are still pretty small in the private equity area,” he said. “They’re not making huge leaps, just going from miniscule to starting to become meaningful.”

SHK CEO Christophe Lee said his firm was in talks with a mainland Chinese firm about launching an onshore p.e. fund with at least US$50 million designed to take advantage of the credit crisis in China. He did not says which Chinese firm SHK is dealing with.

“There is a big mismatch between how you can get your hands on some fund in China as a private entrepreneur, and the system that provides it,” he said at the summit.

“I think private equity as a sector will just completely take off in China in the next few years,” he added.

Lee said SHK is not looking only at China, as the firm is in talks with a Vietnamese firm about a joint venture to help investors access that country, and the firm is planning a Middle East and North Africa fund of hedge funds.

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