Strategies vital for success of global acquisition deals

United States-based hedge and private equity funds rely on the stability of the laws of the US to make acquisitions of distressed companies, deleverage them and improve operations with the goal of selling them for multiples of the original purchase price.

Funds are willing to commit billions of investment dollars because the US Bankruptcy Code is a stable set of laws that allows participants to understand the risks and rewards.

While few barriers exist to buying US companies and their assets, there are only a handful of China-based funds that actively participate in the distressed market. One such fund is Sailing Innovation US Inc, a partially government-sponsored collaboration between Chinese investment firm Sailing Capital Overseas Investment Fund LP and Chinese conglomerate Sanpower Group. But there is no reason why more China-based funds cannot also participate.