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| China prepares to use private equity for acquisitions abroad |
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 China is changing tack and will use homegrown private equity firms as a more subtle weapon to seek out overseas deals. Resources-focused private equity firms are raising billions of dollars and, in terms of deal making, will be far more nimble than China's massive state conglomerates. They will also be able to cut smaller deals and avoid intensive scrutiny from regulators.A group of around 300 mine entrepreneurs recently raised USD73.25 million for the China Mining United Fund, which targets the world for resources such as gold, copper and iron ore. Despite the fund's small size compared to state-owned giants such as Chinalco, Minmetals, and Hunan Valin Iron & Steel, its cozy relationship with Beijing and alignment with official economic policy is clear. Several other resource-focused private equity firms are cropping up across China. Western Prospector Group Ltd, a Mongolia-focused uranium miner, has agreed to be bought by a unit of CNNC International Ltd for about USD25 million. CNNC Overseas Uranium Holding Ltd, a unit of uranium developer and nuclear fuel company China National Nuclear Cooperation, holds 74 percent in CNNC International. "Don't underestimate these small companies," said a China-based source, referring to Chinese fund-backed deals. "One day, if you combine them all, they can also become a market leader in a specific sector."
Source: www.news.mn
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