China writes a $2.5 billion check for TPG

Posted Jun 12th 2008 11:11AM by Tom Taulli
Filed under: China, Private Equity, Verizon Communications (VZ), Blackstone Group L.P (BX)

Last year, the Chinese government invested a cool $3 billion into The Blackstone Group LLP (NYSE: BX). It was before the IPO and seemed to be a good bet.

Of course, it wasn't. The shares of Blackstone have plunged since.

Despite this, China is still hungry for private equity. In fact, according to a report in the Financial Times, the State Administration of Foreign Exchange of China has agreed to invest $2.5 billion in TPG's latest fund (which may reach as much as $20 billion).

Simply put, China is overflowing with cash, so why not seek out higher returns?

True, private equity is ailing right now, but then again, the investment horizon is for the long-term. And with lower valuations, private equity firms are positioned nicely to pick up some attractive buyouts.

Something else: TPG has a strong track record. And, by all accounts, the firm is continuing its winning ways, such as with its latest score in selling Alltel to Verizon Wireless, a joint venture of Verizon (NYSE: VZ) and Vodafone (NYSE: VOD).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tags: bx, china, TPG, vod, vz

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Reader Comments (Page 1 of 1)

6-12-2008 @ 3:22PM

Tom said...

I wonder who is gonna be first to hang there flag over the white house.
The chinks or The camel jocks
They seem to have no problem buying up this country one building or company at a time.
Does anybody really care about whats going on?

6-12-2008 @ 10:45PM

Tom said...

Here is China over flowing with money (read above)
But yet USA, Britain, and other Countries are sending china money for the earthqake victims.
Am I missing something here.
Do I hear laughter coming from china.
No wonder china is over flowing with money
We are sending it to them.
And in return they are buying into the US market to get higher returns back with the money we sent.
Is that laughter getting louder.

6-22-2008 @ 10:44AM

Izzy said...

^^^ Tom... haha... I like your perspective...

6-24-2008 @ 4:04PM

micmar987 said...

More laughter. We keep sending teachers to volunteer to teach English in China. The same teachers learning English in China from American teachers are coming to the USA to teach Chinese without being state certified, and take away the jobs of American teachers who teach foreign languages. Part of their salary is paid by China. Who has the money? Who is losing?