Economy

Morgan Stanley to raise $230m for China PE fund

(Xinhua)
Updated: 2011-05-18 21:23

SHANGHAI - Morgan Stanley launched its first yuan-denominated private equity fund in China on Wednesday to tap investment opportunities in the world's fastest-growing major economy.

This comes after private equity giants Blackstone Group and Carlyle Group have launched their own yuan-denominated funds in China. Goldman Sachs has also been reported to have struck a deal with the Beijing municipal government on a yuan private equity fund, but that has not yet been confirmed.

Morgan Stanley said in a press release it planned to raise 1.5 billion yuan ($230.6 million) via the newly established Morgan Stanley (China) Private Equity Investment Management Co.

The global investment bank has an 80-percent stake in the fund in Hangzhou, the capital of eastern Zhejiang province, with Hangzhou Industrial and Commercial Trust Co. holding the remaining 20 percent.

Morgan Stanley holds a 19.9-percent stake in Hangzhou Industrial and Commercial Trust Co.

Morgan Stanley has bought into large listed firms such as Ping An Insurance (Group) Company of China and Mengniu Dairy Group, and also smaller businesses in the Yangtze River Delta.

Shares of Tongkun Group Co., in which Morgan Stanley holds a stake, rose 10 percent to close at 29.71 yuan on its debut on the Shanghai Stock Exchange Wednesday.

Morgan Stanley has made a paper profit of 1.04 billion yuan as it bought 41.8 million shares in the privately-run Tongkun Group in Zhejiang at 4.9 yuan per share.