If your company is entering the growth stage and in need of capital, a private equity fund is one of the best financing sources. The First China International Private Equity Forum (CIPEF), organized by the Tianjin Municipal People’s Government, the All China Federation of Industry & Commerce and the Association for Corporate Growth (ACG), will be held on June 6-8, 2007 at the Tianjin Binhai International Convention Center. The CIPEF will provide a great opportunity for both private equity funds and Chinese companies.
Mengniu Dairy and Harbin Pharmaceutical Group are two of the most successful private-equity financing stories. With private equity capital, these companies have grown from small/medium-sized developing companies to large enterprises that have successfully gone public in just a few years. The goal of private equity funds is to invest “one plus one to get something greater than two.” In the 1970’s, venture capital investments focused on rapidly growing small businesses with high risks. Today, private equity funds are focusing on equity investments in growth businesses.
Therefore, if your company has a strong management team and stable market share, but lacks capital and an effective marketing strategy, it may be the perfect target for a private equity fund. An investment from a private equity fund could help grow your business and sustain your company’s leadership position.
Being the first and biggest capital raising event in 2007, the CIPEF expects more than 70 private equity funds from the U.S., Europe, and Japan with total capital ranging from $30 billion to $50 billion. In addition, many Chinese investment companies, commercial banks, and intermediaries also will be attending the forum. The forum will provide multiple opportunities for Chinese companies to directly interact with various foreign private equity funds without going abroad.
Private equity funds have become a major funding source in capital markets. Compared to public offerings and bank loans, private equity funding is generally more suitable for small- and medium-sized companies because of its financing scope, less stringent qualifications, and lack of costly public reporting requirements.
Shares owned by private equity fund typically do not exceed 30% of the company’s total shares; however, the private equity investors often request a seat on the board of directors and veto power. They tend to focus on developing the company’s strategy instead of managing the company’s daily operations. As a result, private equity funds will exhibit more influence on the company’s business development and management issues than with funding from a public offering or bank loan.
According to CIPEF sponsors, this conference provides a format similar to a “dating service” for Chinese companies and private equity funds. ACG’s internationally known Capital Connection and Deal Source (“speed dating”) will be the two formats for this conference. Through Capital Connection, attendees will be able to meet as many potential investors as possible. Through Deal Source, a “speed dating” format, pre-arranged one-on-one meetings will help target companies and potential investors exchange information and have more in-depth discussions. All attendees will also have the opportunity to meet with financial services companies and intermediaries. Through panel discussions with topics and information from the “China M&A Annual Conference”, “Tianjin Investment Environment Conference”, “The Third Annual Privately Owned Enterprises Development Tianjin Summit” and others, participants will learn about China’s investment environment, policies and strategies.
Why in Tianjin?
Tianjin has a population of 10 million. It is the economic and transportation hub for China’s northern region. It is rapidly becoming a popular first point of entry into China for many international enterprises and the most important growth region for China’s businesses.
The CIPEF Organizing Committee has visited and extensively exchanged ideas with more than 400 private equity funds and investment banks in San Francisco, Washington D.C., and Dallas. Foreign investors have shown great interests in the Tianjin Binhai New Area and are particularly confident in Tianjin’s traditional manufacturing industries.
How to apply
Register via the CIPEF official website: www.pe-fund.com.
Fill out and submit the registration application online, or pick up the registration form from one of the designated organizations appointed by the CIPEF Organization Committee, and follow the registration instructions.
The Organizing Committee will verify the applicant’s qualifications and arrange meetings with the investors via Capital Connection and Deal Source.
Registration deadline: May 15, 2007