Paris, June 6 2023 – LBO France, a multi-specialist and multi-country investment platform, announces the signature of a memorandum of understanding with Wuxi Capital Group, the sovereign wealth fund of the city of Wuxi. The two parties wish to set up a fund whose aim will be to support European SMEs penetrate the Chinese market and realise their full potential in the country. The fund, which has a target size of €100 million, is expected to be 40% backed by Wuxi Capital and its partners. It will benefit from experts of both structures, French and Chinese, who will provide a detailed understanding of the local issues specific to each of the targeted companies as part of the portfolio building process.
Following the opening of its Shanghai office last December, and the recruitment of Feng Zhao within the investor relations team in order to consolidate its investor base abroad, LBO France aims to contribute to the development of French and European companies in China. The objective is to acquire stakes in subsidiaries and joint ventures already established or in the process of being set up in the country, in order to strengthen their equity capital and support their organic or external growth. The objective is also to provide commercial, industrial and strategic added value in key areas such as structuring the company in China, patent protection, recruitment and market access.
The Chinese market offers a wealth of opportunities and is on a strong and sustainable growth trajectory. Today, trade between the two regions is growing steadily. Nearly 60%* of European companies want to expand there in the next two years, and nearly 50%* of those who have set up operations there are generating higher-than-average profitability while benefiting from market potential, R&D capabilities and attractive valuation potential. In the first quarter of 2023, 10,000 new foreign companies set up in China**.
However, the Chinese market remains difficult for European players to penetrate, particularly for French or medium-sized European companies that do not have local contacts capable of understanding the specific characteristics of the country and its various players. In response to this challenge, LBO France and Wuxi Capital have decided to forge a close partnership through the creation of a vehicle to be named the Panda Value Fund, with a hands-on approach designed to encourage European companies to set up in China and support their development locally. Local authorities are particularly aware of the need to retain, attract and back European SMEs by providing them with operational support to put them in touch with a network of existing companies, by providing them with financial intermediaries and assistance with administrative procedures to facilitate their access to the market.
*Source: China Business Confidence Report, published by EU-China Chamber of Commerce
**Source: Caixin April 2023
About LBO France
A pioneer in private equity in France, LBO France is today a leading multi-specialist and multi-country investment platform. Active in Private Equity, Real Estate, Venture and Listed Investment, the Company has been expanding for several years its activities in Europe, especially in Italy via its subsidiary Polis Fondi SGR, as well as on the African continent via its subsidiary CGF bourse. Wholly owned by its managers, LBO France is one of the founding members of the International Climate Initiative and one of the first signatories of the France Invest charter for parity.
Find out more: www.lbofrance.com
Media contacts LBO France
Antoine Denry: +33 (0)6 18 07 83 27 / antoine.denry@taddeo.fr
Julia Paget: +33 (0)6 38 55 68 78 / julia.paget@taddeo.fr