China Development Bank has reportedly taken a minority stake in TPG Holdings, part of the private equity group run by David Bonderman, the lawyer turned investor who was a pioneer of leveraged buyouts of financially troubled firms in the 1990s. TPG is today one of the best known and largest private equity investment firms in the U.S. with $48 billion of capital under management. It has been expanding its investments internationally, particularly in Europe.
Caixin, which reported the deal on the basis of unnamed sources in the bank without providing financial details, says CDB has been looking since last year to become more deeply involved in private equity investment as it transforms itself from a policy to a commercial bank. Bonderman’s fellow founding partner, Jim Coulter, is said to be in Beijing to sign the agreement with CDB Capital, the bank’s private equity and investment arm set up in 2009. In April, TPG sold a 4.5 percent stake in itself to Singapore and Kuwait’s sovereign wealth funds, putting an estimated value on the firm of $10 billion. Two other U.S. private equity funds, Blackstone and Carlyle, have also recently similarly taken capital from sovereign wealth funds to boost their fundraising.
Update: Bloomberg has a good backgrounder on TPG’s activity in China plus news of the firm’s intention to poach Steve Sun from Goldman Sachs to boost its China business.