Chinese dairy firms catch private equity fancy

Private equity firms seem to be warming up to the Chinese dairy sector, with Internet tycoon Jack Ma spearheading a fresh round of investments in the sector.

Yunfeng Capital, a private equity firm co-founded by Alibaba Chairman Ma, Target Media founder Yu Feng and Citic Private Equity, have acquired a 60 percent stake for 2 billion yuan ($328 million) in a unit of dairy giant Inner Mongolia Yili Industrial Group Co Ltd.

According to Yili, the investment will help sustain milk supply sources, enhance farm building capacity and also expand and upgrade the dairy source network to boost profitability.