SHANGHAI--Hony Capital Ltd., China's largest private-equity firm by assets, is looking to team up with domestic partners to make offshore acquisitions as the global economic slowdown brings down asset prices and serves up investment opportunities.
John Zhao, founder and chief executive of the fund which manages over US$7 billion in assets, said the combined value of the firm's domestic and offshore deals this year should at least match last year's total of more than 10 billion yuan (US$1.6 billion).
While the home-grown Chinese investment firm has been focused mainly on the domestic market since it was founded in 2003, Hony is currently looking to ramp up overseas investments, especially in developed markets where asset prices have come down significantly amid a downturn.
"It could be a good time to make deals, especially for mergers and acquisitions," Mr. Zhao told Dow Jones Newswires in an interview.
"More and more Chinese firms we've invested in are envisioning themselves as global companies. Some of them are starting to acquire mature technologies and brands. We will continue to finance them and team up with them to venture into the global market," he said.
Sponsored by Chinese conglomerate Legend Holdings Ltd., Hony started out as a manager of U.S. dollar funds focusing on investing in domestic state-run firms in construction, healthcare, finance, retail, media and renewable energy. It has invested in about 70 firms, including Changsha Zoomlion Heavy Industry Science & Technology Development Co., China Glass Holdings Ltd. and Simcere Pharmaceutical Group.
About four years ago, Hony moved into cross-border investments.
"We want to become a bridge, through which Chinese companies can acquire advanced technology and brands in mature markets while foreign companies can tap China's huge growth potential," said Mr. Zhao.
According to the company's website, it holds stakes in foreign companies including Japanese property investment firm Tokai Kanko Co., Italian machinery maker Compagnia Italiana Forme Acciaio SpA and Singapore-listed Biosensors International Group Ltd., which is engaged in cardio-technology.
In December, Hony more than doubled its assets under management by raising $4 billion for two new funds--a $2.37 billion dollar fund and a 10 billion yuan fund. Mr. Zhao said cross-border investment is the focus of the dollar fund.
Domestically, he said Hony is set to gear up its investment in the second half of the year, although some economists have warned of risks from a further slowdown in the world's second-largest economy.
"The downturn might continue for a while. But I'm confident that China can maintain strong growth over the long run," Mr. Zhao said.
"We slowed our investment pace in the first half because lots of time was spent on research on how to cope with the changing [economic] situation. But in the second half, we will definitely accelerate the pace," he said.
Since its establishment, Hony has attracted funds from dozens of prominent investors, including U.S. pension funds like Calpers and Calstrs, Singapore sovereign-wealth fund Temasek Holdings and major Chinese institutional investors such as the national pension fund.