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Macquarie and Everbright propose ventures in China
Published on: 2009-08-20
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The Macquarie Group, the Australian bank, and China Everbright, a financial services group, said Wednesday that they were forming two funds that would seek a total of $1.5 billion for infrastructure projects.


It is the fourth such pairing involving major new plans for mainland China this month.


Macquarie and Everbright said they would contribute $100 million of their own to the funds, but many of the other details remained to be ironed out.


One fund will be open to nonretail investors outside of China, and the other to investors in the country.


Both funds will work together to back projects in transportation and water utilities — industries that Beijing is trying to develop.


In a joint statement, Chen Shuang, Everbright’s chief executive, said that the private sector had a history of investing in infrastructure in the country. “The importance of private capital in Greater China is demonstrated in the nearly 60 listed infrastructure operators with a combined market capitalization of over $150 billion,” he said.


Paul Scanlon, a spokesman for Macquarie, said the structure of the funds would depend upon the parties that contribute to them, because the demands of sovereign wealth funds and private investors often differed.


Only after the money has been raised, Mr. Scanlon said, will the funds begin considering specific projects for investment. In their joint statement, the banks said that they expected to close the funds to new investment next year.


Kevin So, a spokesman for Everbright, which is well connected to Chinese companies and government authorities, said that Beijing was encouraging investments in infrastructure and that Macquarie brought infrastructure expertise to the table.


“Everybody knows they’re a leading investment manager in this area,” he said.


Several other banks are expanding their presence in China, where the government is pursuing an ambitious four trillion yuan ($586 billion) stimulus program that also focuses on infrastructure.


This week, the First Eastern Investment Group said it was planning to raise 6 billion yuan for a private equity fund in the mainland, and the French brokerage firm CLSA said that it planned a 10 billion yuan asset-management fund in China.


Last week, the Blackstone Group and the government of Shanghai announced the creation of a local-currency private equity fund that aims to raise about five billion yuan.

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