Financier Jacob Rothschild has started raising a $750m fund to help China-based companies take minority stakes in overseas peers.
Lord Rothschild’s fund management firm, RIT Capital Partners, has formed a joint venture with China-based firms Creat Group, which manages RMB6bn ($900m), and Quercus Ventures to manage the fund. The joint venture is called J Rothschild Creat Partners and will take significant, unleveraged, minority stakes in international companies (ex-Japan), in the technology and clean-tech, green economy, healthcare, natural resources and luxury goods sectors.
RIT and Creat are committing "seed capital", reported by newswire Reuters to be about $100m, to start the fund. Other investors are expected to come from the newly-formed China International Chamber of Commerce for the Private Sector, which is meant to help overseas investment by mainland Chinese private enterprises and was founded by the chairman of Creat, Dr Zheng.
Dr Zheng was previously vice-chairman of the All-China Federation of Industry and Commerce, which had relationships with private enterprises and investment institutions in China and remains involved in policy making for China’s private sector.
Lord Rothschild (pictured, from a painting at the National Portrait Gallery) said: "This venture will allow China’s private sector to invest in western companies, while providing opportunities for western companies to enter China."
Lord Camoys, chairman of Quercus Ventures, an investment advisory firm formed in 2009 with Lord Rothschild owning 20%, said: "Quercus is proud to have brought together RIT and Creat to launch this first-of-a-kind joint venture."
Law firm O’Melveny & Myers represented RIT, a UK-listed investment trust with net assets of £1.9bn ($2.5bn) that is chaired by Lord Rothschild, whose family interests retain a significant holding in the vehicle.
Separately, investment bank H&Q Asia Pacific and China-based transport company HNA Group have formed a partnership to manage RMB5bn in private equity funds focused on China’s logistics and consumer sector.