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$32bn alts manager inks multi-million dollar Chinese deals

Investcorp has partnered with a Chinese counterpart, and separately invested in a Beijing-based artificial intelligence service provider.

$32bn alts manager inks multi-million dollar Chinese deals

Alternative investment manager Investcorp has partnered with a Chinese counterpart, and separately invested in a Beijing-based artificial intelligence service provider. 

The $32.2bn Bahrain-based manager unveiled a joint venture with China Resources Capital Management on Tuesday. They have moved to acquire a majority stake in City Super Group, that runs a high-end supermarket chain in Hong Kong and Shanghai. 

A day earlier, the manager had announced an investment in Terminus Technologies. Terminus, which was founded in 2015, is headed by former JP Morgan investment banker Victor Ai.

While Investcorp did not disclose the value of both deals, Bloomberg reported that the City Super’s chain was valued at almost $300m, citing sources close to the matter.  

Investcorp and CR Capital will take a 65% stake in the chain, going by the agreement. Meanwhile, existing shareholders such as Fenix Group and Lane Crawford Joyce Group will hold 35%. 

The transaction is expected to close in the fourth quarter, subject to regulatory approval.

Investcorp said the deal will allow City Super to accelerate its expansion plans, and capitalise on consumption growth and premiumisation in Greater China and Asia. 

Co-CEO Hazem Ben-Gacem said the Asia food sector continues to offer attractive opportunities. ‘As one of the most preeminent food retail and lifestyle brands in Asia, we believe that City Super Group is well-positioned for growth. 

‘We look forward to working with our world-class partners to support City Super Group’s continued expansion,’ Ben-Gacem said. 

Investcorp is not new to the space, having launched a food brands fund that closed with $275m in capital commitments in April

The firm has also backed Bindawood Holding, a Saudi Arabian supermarket chain, and Fortune Fish & Gourmet, an American distributor of seafood and gourmet food products.

Meanwhile, it has invested in technology-enabled businesses for 20 years. It focuses on those with established business models, helped by long-term secular growth trends, and added Terminus to the mix on Monday.  

Terminus partnered with Hong Kong-based asset manager China Everbright to launch an AI fund in July. 

The fund aims to raise RMB 10bn ($1.5bn) and is keen on companies that will ride the ‘smart economy’ wave. ‘Investcorp is optimistic about the market development prospect and the growth of China’s AI economy. 

‘China and its respective enterprises have accumulated considerable experience in artificial intelligence of things, resulting in the number of companies growing at a scale never heard of before,’ Ben-Gacem said.

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