[ad_1]
Warburg Pincus launches an asset management company in China to address the distressed opportunities of the country’s heavily indebted real estate sector.
The US private equity firm said Monday that she and Wensheng, a Chinese asset manager, were jointly investing $ 600 million in a partnership that aims to accumulate up to $ 5 billion in assets managed in the next half of the decade.
It is the latest example of large American banks and investors forging deeper ties to the entire Chinese financial industry, despite the charged geopolitical context between the two countries.
It also comes when Beijing has started squeezing the country vast real estate sector, imposing leverage restrictions on their major developers and limits on bank mortgage lending.
“In light of the ongoing financial reform in China and the continued regulatory development, the real estate special situations sector is entering an accelerated growth trajectory,” said Qiqi Zhang, CEO of Warburg Pincus.
China’s troubled sector has been under the spotlight of international markets this year since Huarong, the state-backed troubled debt manager with $ 22 billion in dollar-denominated debt, did not release its annual report in March.
The delay raised questions about its balance of Rmb1.7tn ($ 260 billion) after the January execution of its former presidency for financial crimes and led to savage changes in its bonds after stopping trading on their actions.
Warburg Pincus was an investor in Huarong before its initial 2015 public offering in Hong Kong, and still has an 8% stake. Across Asia, it has invested $ 6 billion in real estate since 2005.
China’s rapid economic recovery has raised concerns about its real estate prices. The so-called “three red lines” government policy, which was initially pointed out last summer, forces developers to abide by balance sheet metrics designed to control their lending.
Evergrande, the most indebted developer in the country, has seen its share price fall 33% so far this year and has embarked on a series of asset sales. In March, said it had reduced its total interest debt by almost a quarter to $ 103 billion.
Other U.S. private equity firms are also active in the Chinese real estate industry. In June, Blackstone announced he had hit one $ 3 billion offer for Soho China, office developer. Earlier this year it bought an urban logistics park in southern China for $ 1.1 billion.
Other recent U.S. joint ventures include a Goldman Sachs partnership with ICBC, the state-owned bank, which was filed in May.
[ad_2]
Source link
