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GLG and SASAC Host Event on Private Equity and SOE Collaboration

GLG

October 22, 2013

New York, New York; July 5, 2013 — Gerson Lehrman Group (GLG) announced that it will hold an all-day conference today in Beijing, run jointly with the Research Center of China’s state-owned assets supervision and administration commission (SASAC), the theme of which is “SOE / PE collaboration – a winning Formula?”. As in the past, this high-level event is by invitation only and closed to media. GLG and SASAC expect about 300 attendees from key state-owned enterprises, leading global and Chinese PE firms, premier management consultancies, and government and academic bodies.

Topics to be discussed at today’s event include global and domestic economic trends, China’s economic reforms, the development of SOES, trends in SOE outbound investment, innovative joint investment models, and ways that private equity firms can assist SOES in their ambitions to become world-class enterprises. Examples of past and potential collaboration between private equity firms and Chinese SOES will be shared and openly discussed, with a view to exchange insights on best practices and lessons learned.

Matthew Creedon, managing director, Gerson Lehrman Group Asia, said: “Chinese companies are poised to make more and more investments abroad, especially while western economies are still recovering from an economic downturn. Global private equity firms can help SOES navigate regulatory, political, financial, cultural and management challenges in overseas deals and may also assist in strategic planning, restructuring, and operational improvements. Both GLG and SASAC Research are proud to facilitate such cooperation by hosting this conference and providing them with a platform for exchange of professional ideas and thought leadership.”

Mr. Li Baomin, Director of SASAC Research Center, remarked: “Since the announcement of the SASAC guidelines on private investment in the restructuring of SOES, the central and local governments of China have further advanced the reform initiative by proactively reaching out to sources of capital including private equity funds, and broadened the channels in which private investors can cooperate with SOES, such as joint ventures. China has entered a new phase of reform and development. Cooperation between SOES and private investment is being encouraged as a means to facilitate the development of emerging industries, overseas investment and international operations – and SOES are increasingly being required to put such considerations at the center of their corporate strategy. We believe that the cooperation between SOES and PE firms will be a successful model for the future.”

SASAC is authorized by the state council to supervise and manage the state-owned assets of enterprises under the supervision of the central Government (excluding financial enterprises) and to guide and push forward the reform and restructuring of SOEs. SASACResearch Center is the only research organization in China focused on the management of state-owned assets as well as the development and reform of SOEs. Long-term cooperation between SOEs and private equity firms is an important focus of the SASACResearch Center’s work.

This year’s conference continues to receive support from key industry professionals and prominent academic and public figures. Attendees of the conference today include senior executives from SOEs such as three Gorges Corporation, partners from leading private equity firms including the Carlyle Group, China merchants capital, Citic Capital Partners, Primavera, Unitas, and consulting firms including Roland Berger and McKinsey & Company. Government and academic bodies attending include the national development and Reform commission (ndRc), the Chinese Academy of Social Sciences, and the center for Geo-Economics Research, Shenzhen Graduate School, Peking University.

William Wang, Partner of Primavera Capital commented on the recent maturation of the industry: “Right now, the timing is good for private equity funds to enter into new investments. The availability of both controlling stakes and minority stakes in attractive businesses has tremendously increased in recent years. Although some of the companies are growing at a slower pace than before, there remains a huge opportunity to create value by investing in and growing these businesses both in china and abroad.”

Qi Wu, Senior Partner of Roland Berger, said: “Provided companies have a clear international expansion strategy, cooperating with PE funds can provide them with valuable information on potential acquisition targets and the professional expertise necessary to make the acquisition process more efficient. At the same time, working with such funds can serve to ease the concerns of acquired companies’ shareholders regarding Chinese companies, and help SOEs establish corporate governance models more suited to the local environment. It’s truly a win-win situation.”