Sharp-nosed Chinese businessmen have been flocking to pre-IPO opportunities in an effort to make fast money as China’s economy flourishes. Private equity firms have relied heavily on the pre-IPO investment type, who would simply buy into companies as minority shareholders, take them public in Shanghai or Shenzhen within an average period of two years, and eventually sell the shares after the lock up period was over, all with a comfortable valuation premium.  The typical hold period tends to be more or less 3 years [2 before listing and 1 lock up year], whereas such transactions used to generate...

India’s financial code for the fiscal year 2013-2014 (from April to March) is vague and generic, not enough substance to generate debate between the various opinions. The document, presented to the Parliament by India’s Finance Minister Palaniappan Chidambaram, consists of a series of horizontal proposals, both optimistic and articulate. It doesn’t satisfy any particular sector of the economy, and it allows the government to proceed in its course. Objectively, New Delhi’s room to maneuver has been restricted. The growth rate of India’s GDP is a far cry from its peak at 9.3% in 2010, when...

China’s cross-border deals can go sour without local knowledge, according to Mandarin Capital, which has facilitated 10 deals between Chinese and Italian companies. Chinese companies that attempt to acquire assets in the US and Europe “often find themselves completely unprepared and defenseless”, according to Alberto Forchielli, managing partner of cross-border firm Mandarin Capital Partners. China’s outbound acquirers — 90 percent of which are state-owned enterprises — who attempt to do M&A without private equity backing can be “beat up abroad” Forchielli said, and he...

Alberto Forchielli on how private equity must adapt to a China that is no longer the workshop of the world. China’s economic boom through the aughts made many sectors seem like get-rich-quick schemes. Often it seemed like anyone with an ounce of business savvy and a few connections could make money. The private equity industry in particular was exemplary of this phenomenon. Upstart firms could promise their investors high returns by buying into most any company and then taking it to IPO. Deal volumes exploded from US$1.6 billion in 2003 to US$15.2 billion in 2011, according to Bain & Co. But...

Background On 17 February 2012 the website www.manager-magazin.de announced that Hamburg-based closed-end investment fund LF 16, created by fund manager Lloyd Fonds, had declared a state of Insolvenz.1 LF 16 was a specialist fund investing in the shipping sector, particularly in the purchase of vessels. Put simply, a private individual joining a fund must put up a portion of the funds needed to acquire the vessel from the shipbuilder, trusting that once it is ready to go into service its value is such as he will make a profit, if sold, or the price at which the vessel is chartered will allow him to...