KKR hires China Development Financial's Paul Yang as China head

The appointment, which takes effect in January, comes as the private equity firm prepares to launch its third pan-regional fund, for which it is targeting up to $7 billion. It also follows the announcement that David Liu, co-head of Asia private equity and head of China at KKR, and Julian Wolhardt, the regional leader of China, will leave the firm at the end of this year to raise a China-focused fund.

Yang - who will be KKR's second recent hire in China after Zhen Ji joined from CITIC Capital as a managing director - has more than 20 years of investment experience. He joined CDF in 2005 as CIO and head of private equity, and was promoted to his current position in 2011.

Joe Bae, Asia managing partner at KKR, said that Yang's experience in private equity, venture capital, and corporate and commercial banking means he is well positioned to lead the firm in China. "As we head into our next decade of investing in China, we plan to continue to expand our scope of investments to include more mid-cap buyouts, cross-border deals, and opportunities related to domestic consolidation there, as well as continuing to participate in growth-oriented investments," he said.

This diversification doesn't necessarily mean the firm will employ a wider variety of capital pools: most investments will meet the requirements of the flagship pan-regional fund. However, a source familiar with the situation did indicate that credit and mezzanine deals, for example, are likely to become more prevalent in relative terms, and these needs would be met using other financial reserves.

CDF has more than $20 billion in assets and employs 7,000 people in Hong Kong, Taipei, Shanghai, Seoul, Singapore, Bangkok and Jakarta. Its key businesses are China Development Industrial Bank (CDIB), KGI Bank and KGI Securities. During Yang's tenure, CDF's private equity unit, CDIB Capital, has transitioned from being a balance sheet investor to a business with third-party capital at its disposal.

The debut Asia fund closed in 2015 at $405 million. It pursues investments in particular geographic corridors based on where it has offices - Taiwan-China, Korea-China, the US-China - and seeks to offer portfolio companies more than just a domestic strategy. Towards the end of last year, CDIB Capital launched a later-stage venture fund to focus on cross-strait expansion deals, targeting $170 million.

Based in Hong Kong, Yang will lead KKR's team and business development in Greater China, which involves managing more than 20 professionals based in Beijing. Liu and Wolhardt will continue as advisors to the firm. Liu said in a statement that they would "look forward to finding opportunities to work in partnership" with KKR. AVCJ understands the relationship between KKR and the new firm will be informal in nature.

Since establishing its Asia platform in 2005, KKR has invested more than $10 billion in over 60 transactions across the region. It has seven offices in Asia with over 120 professionals as well as 15 operational executives at KKR Capstone. Other recent human resources developments include the recruitment of Ashish Shastry, managing partner at Northstar Group, as head of Southeast Asia and Hyoung Seok Lim as a managing director in Korea.

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• Topics
• Greater China
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• Buyout
• KKR
• China
• Appointments
• Asia