Ion network
Updated: 2007-07-24 11:47
Q: So far 3i has focused on making minority investments in Chinese investee firms. Why?
A: When we were set up over 60 years ago, our sole focus was to invest 'growth' capital. We pioneered the minority investment model and have developed a very good understanding and method of making these kinds of investments. We believe that the business is the management's responsibility to run and that we provide the necessary strategic support, which can be in a variety of forms. Perhaps another important difference between the situation in China compared with Europe or the US is that many private companies are relatively younger and thus owners are less keen to relinquish majority control. In Europe people are looking for ways to turn the business around or handle succession issues.
Q: How do you persuade investee companies that 3i is a good business partner?
A: 3i offers a global network of entrepreneurs, sector experts, experienced practitioners, corporates and advisers that can be very useful to our investee companies, both in developing their competitive edge at home and in expanding overseas. 3i's international offer is fundamental to investing in China. For example, when we invested in Jason Jiang's Focus Media back in 2004 we introduced Eric Rozenkranz who was appointed as the company's VP. Eric's experience both in Asia and the US was very useful both in understanding Jason's model and raising their profile before listing in April 2005.
We later came across an identical start-up business in India and immediately thought of Jason, introducing him to the business prior to providing capital to fund the company's expansion. This is the largest company in Asia that Jason has partnered with and has over 50 percent of the Indian market. Another example is PDC, which we invested in at the end of 2005. In the following spring we took the CEO to London to meet with members of our branded retail network in Europe.
We organized an exclusive lunch with over 60 of our contacts and several media interviews with the key European trade press. Following that we introduced the CEO to the former CEO for Le Prentemps who we know well in Paris, and brought her to Beijing to spend a week with Alfred.
Q: What does 3i's People Program involve?
A: Our People Program was set up back in the late 1980s to develop our network of independent directors and is unique to 3i. It is a global network of seasoned executives who work with us to source, assess and manage deals, sometimes taking a seat on the board or a non-executive position.
We have brought our People Program model to China and have a dedicated person based in Shanghai who is in charge of developing the network across Asia. Having experienced local professionals on our People Program adds a different dimension to the group internationally and it is easier for them to work with local businesses.
Q: Of all the well-known international private equity firms, what makes 3i different? And what are the benefits of being listed as a private equity firm?
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