TPG Raises $303 Million Selling Its China International Stake

(Bloomberg) -- TPG sold most of its stake in China International Capital Corp. for HK$2.38 billion ($303 million), almost a decade after it invested in the Chinese investment bank, a person with knowledge of the matter said.

The private equity giant made roughly a 40 percent return on the CICC shares it sold, the person said, asking not to be identified because the details are private. TPG took advantage of a Chinese stock market rally this year that drove CICC up more than 60 percent from an October low. The U.S. firm sold more stock than it had planned because of strong demand from investors, according to the person.

TPG’s investment in CICC was at times a rocky one, with the buyout firm deciding in 2012 to write down its stake to 60 cents on the dollar following a slump in stock and bond underwriting in China. It has also been a lengthy holding period by the standards of private equity firms, which typically seek to exit after about five years.

CICC, whose partnership with Morgan Stanley starting in the 1990s became a test case for foreign investment banks’ forays into China, went public in Hong Kong in 2015. The stock is up 84 percent from the initial public offering price through Monday. TPG sold 75 percent of its shares for HK$18.58 apiece, a 2 percent discount to Monday’s close, the person said.

Shares of CICC slipped 2.6 percent to HK$18.46 on Tuesday. Representatives for CICC and TPG, which is based in San Francisco and Fort Worth, Texas, weren’t immediately available for comment.

TPG is the latest foreign private equity firm to pare its stake in CICC. KKR & Co. sold its entire holding last year, while Singapore’s GIC Pte Ltd. cut its holding, according to CICC’s annual reports. Both were among buyers of Morgan Stanley’s shares in the securities firm in December 2010.

The CICC sell-down comes at a time when private equity firms are gathering firepower to step up investing in Asia, home to some of the world’s fastest-growing economies. TPG raised more than $4.6 billion for its Asia private equity fund in February, almost 40 percent larger its previous pool of capital dedicated to the region.

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