China Fund in Talks to Buy Stake in US Private Equity Firms


Three of the biggest U.S. private equity firms have held preliminary talks about selling  minority stakes to China's giant Social Security Fund, the Financial Times said on Tuesday.

The fund, which had 460 billion renminbi ($61.5 billion) in assets at the end of June, held discussions during the summer with the Carlyle Group, Kohlberg, Kravis, Roberts and TPG, formerly known as Texas Pacific Group, the report said, citing people familiar with the negotiations.

It said negotiations would focus on the possibility that the Chinese fund would take a stake of up to 9.9 percent in one of the U.S. firms.

The newspaper said negotiations between the U.S. firms and the Chinese fund have largely stalled since summer, reflecting the Chinese reaction to China Investment Corp's minority investment in U.S. private equity firm Blackstone Group .

It said the fall in Backstone's share price from $31 since its listing in June had left Chinese investors leery about similar deals. Blackstone shares ended trade at $25.50 on Monday.

An official in the overseas investment bureau of the Chinese fund declined comment, saying he was unaware of such talks, the newspaper said.

China's Social Security Fund, a national social security fund of last resort, has been allowed to invest abroad since May 1, 2006, the Financial Times said.