Leveraged buyouts, growth capital, angel investments, and seed funding—these private transactions take place, largely out of the public’s eye, not only in Connecticut or Silicon Valley, but also in Beijing, Shenzhen, and Shanghai.
In 2016, China’s private equity (PE) and venture capital (VC) firms raised over $70 billion, more than 20% of total such funding globally. At the same time, these firms also deployed capital to the tune of $223 billion, accounting for more than 70% of global PE/VC investments.
As late comers, these Chinese firms have rapidly grown into formidable financiers. Most Chinese PE firms are particularly interested in products and services that can be commercialized and scaled up quickly in China. They tend to invest in areas that align with China’s shift to a more consumer-driven economy. Meanwhile, Chinese VCs have been active players globally, particularly in Silicon Valley. They have focused on areas such as artificial intelligence, Internet of Things, and electric vehicles.
CITIC Capital is a global alternative investment management and advisory firm, whose core businesses include private equity, real estate, structured investment and finance, and asset management. The firm has $20 billion assets under management, most of which comes from global institutional investors. The International Private Equity arm of CITIC Capital focuses exclusively on mid-size foreign companies in manufacturing, food, consumer goods, healthcare, and technology, media, and telecom; it also helps to facilitate China market access.
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In January 2016, CITIC Capital, along with Hua Capital and Goldstone Investment, co-led a $1.9 billion acquisition of OmniVision Technologies, a California- based developer of advanced digital imaging solutions. OmniVision stockholders will receive $29.75 per share in cash.
In July 2014, CITIC Capital bought out DDS Lab for $40 million. DDS, established in 2005 and headquartered in Tampa, Florida, is a dental laboratory that sells custom dental products to dental service organizations, mid-size group practices, and sole practitioner dentists across the United States.
In March 2014, CITIC Capital made a $22 million Series D investment in FRX Polymers, which is a global leader in polymeric halogen-free flame retardant solutions.