Temasek launches $1.9b China fund
Singaporean sovereign wealth fund Temasek has launched Pavilion Capital, an investment vehicle that will channel up to S$2.5 billion ($1.9 billion) into deals in north Asia.
The fund, which will mainly focus on China, will be managed by Tow Heng Tan, Temasek's former chief investment officer. Still in its early stages, it has not yet been established whether it will welcome third-party investors.
Temasek's second fund in two years, Pavilion is expected to concentrate on supporting small and medium-sized privately-owned businesses.
In 2010, the state investment company set up Seatown Holdings, a $2.9 billion semi-autonomous vehicle which Temasek's annual report described as "a co-investment platform for sophisticated investors in the medium term".
Seatown has invested both in debt and in equities as a co-investor with Temasek, and with Temasek investee Hopu Investment Management on deals such as the joint $235 million equity investment in China Yurun Food Group in April 2010. It may open for retail investor participation in 8-10 years through bonds or funds.
Last November, meanwhile, Seatown joined forces with Temasek to buy 10.4 billion shares in China Construction Bank from Bank of America.
Temasek's portfolio was valued around US$150 billion in March last year, with China featuring as its second most favored investment destination, after Singapore. The firm allocates 77% of its capital to Asian assets.
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