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Apax plans move into China

The global buyout firm is expanding its footprint to mainland China as talks with sovereign wealth funds progress in the background, according to chief executive Martin Halusa.

Apax Partners, the global buyout firm, is set to open offices in Shanghai and Beijing later this year as it seeks to increase the number of Asian investments in its portfolio.

The mainland China offices would be in addition to its presence in Hong Kong, where it has had an office since 2005, and in line with Apax’s strategy of a having a local presence and a global reach, according to a source familiar with the firm’s plans.

He also confirmed the firm was in “low-level, low intensity” talks with a number of sovereign wealth funds as the firm’s chief executive Martin Halusa revealed today in an interview with UK newspaper Financial Times.

If the talks reach a successful conclusion, Apax intends to use the capital to establish an evergreen vehicle to invest in its funds. The source said: “It would help us wipe out some of the vagaries of the fundraising cycle. It would become a cornerstone investor in present and future funds. It would grow and take on a life of its own.”

He said the firm would as ever welcome investors interested in a long-term partnership who could bring more than just capital.

In its first annual review published today Apax said it believed the best performing funds “would be those with genuine global reach and financial scale”. It said its nine offices in nine countries eanabled it “to spot emerging trends early, support the growth of companies and use the financial markets most effectively”.

Over the past 10 years, Apax funds’ average annual profit growth rate among its portfolio companies has been 18 percent, of which it attributed 65 percent to top line improvement.

Click here to subscribe to Private Equity International, PEO’s sister magazine, which this month is carrying a profile of Martin Halusa and his firm.