Invesco WL Ross, which combines the private equity expertise of WL Ross & Co with the China experience of its parent Invesco, and Huaneng Capital Services, a subsidiary of the country’
Invesco WL Ross, which combines the private equity expertise of WL Ross & Co with the China experience of its parent Invesco, and Huaneng Capital Services, a subsidiary of the country’s largest power producer China Huaneng Group, have established a joint venture, Huaneng Invesco WLR Investment Consulting Company.
The 50:50 venture with China Huaneng Group, a state-owned enterprise, aims to identify and assess private equity investment opportunities in power generation and to help construct a platform for a private equity business in China.
‘After more than two decades of growth and development, China Huaneng Group has become China’s largest power generation enterprise in terms of asset scale and installed capacity,’ says the company’s vice-president Huang Yongda.
‘The group also pioneers the use of foreign investment, overseas listings and financial operations while maintaining its leading position in the power generation industry. As of June 30, China Huaneng Group had CNY421.6bn (USD61.6bn) in assets, and is the world’s third-largest power producer in terms of installed capacity with 75,790 MW.’
‘The equity fund management partnership between Huaneng Capital Services, which is responsible for China Huaneng Group’s financial asset management and operations, and Invesco is a proactive effort in using new financing means to promote industrial development. This also marks a strategic move in the pursuit of global presence.’
Invesco president and chief executive Martin L. Flanagan says: ‘Combining Invesco’s global investment capabilities – particularly the deep private equity expertise of Wilbur Ross and his team, who have been involved in many power generation and coal company restructurings over the years – with China Huaneng Group’s knowledge of the energy industry in China will present compelling investment opportunities.
‘Invesco has a growing presence in the greater China markets with our Great Wall mutual fund joint venture in Shenzhen and our representative office in Beijing. We believe alternative investment strategies can play an important role in helping investors achieve their long-term investment objectives, and we are pleased to add the expertise provided by this joint venture to the Asia real estate capability we established in Shanghai in 2007.’
Wilbur Ross, chairman of Invesco WL Ross, adds: ‘This unique collaboration may become the model for the new private equity industry in China. It blends the skill sets and relationships of one of the largest Chinese state-owned enterprises with WL Ross, a private equity firm which has a proven track record, and Invesco, with its experience in China and global distribution capabilities.’
Invesco has more than 25 years’ experience in managing alternative strategies and USD58bn in alternatives assets under management, and has invested in Asia since 1962. The group began establishing a presence a decade ago through investment in Chinese equities, which has expanded since into businesses in both Qualified Foreign Institutional Investor and Qualified Domestic Institutional Investor schemes.
Invesco was also the first US-based fund management company to receive approval to operate a joint venture fund management company in China, Invesco Great Wall Fund Management, which was established in 2003 in partnership with Great Wall Securities, a subsidiary of Huaneng Capital Services.
Huaneng Capital Services and Invesco WL Ross have appointed Shen Zhongmin as chief executive of Huaneng Invesco WLR. As managing director since 2006 of the Hong-Kong-listed holding company of China Light and Power, he was responsible for the group’s businesses in mainland China, following more than 12 years of experience in the country’s power and energy industry with Sithe Energies and China Resources Power. Shen began his career in 1994 with Wheelabrator Technologies, an energy and environmental services company majority owned by Waste Management.
China Huaneng Group is the largest by generating capacity of the five independent power producers in China. Huaneng Capital Services is responsible for the management of the group’s financial assets and enterprises and providing financial support for the development of the its energy business. At the end of last year, it had aggregate capital of CNY42.3bn and net assets of CNY11.1bn.
WL Ross currently manages more than USD8bn in funds targeting distressed opportunities, out of Invesco’s total of USD461bn in assets under management at the end of June.
