Investindustrial brings Euro mid-market to Shanghai

The new office will be headed by Warren Liu, Taiwanese by birth and with over 30 years of operational experience in Asia with Schlumberger, MasterCard, and KFC. He was recruited last year with no financial investment experience, but his operational background suits the new office’s focus and the strategy, according to Carl Nauckhoff, Principal and Head of Investor Relations. “We think that’s the right priority,” he told AVCJ. “The industry experience is more important.”

Although the Shanghai office marks a new chapter for the company, Investindustrial has already had a presence in China for some years through portfolio companies such as phosphorus manufacturer Italmatch Chemicals, which has facilities in Shanghai.

Investindustrial has historically focused on three business areas: industrial and manufacturing businesses; premium and luxury brands such as investee Ducati motorcycles; and services plays. The firm plans to support the first two areas out of the Shanghai office.

“We really want to add more resources in China on the ground to be able to help those companies achieve critical growth, where the rest of the world will be a very low-growth environment for the foreseeable future,” said Nauckhoff.

The new Shanghai office will build on the firm’s existing strategy of buying local facilities for portfolio manufacturing businesses and transferring their cost base to Asia, but will add the consumer focus. “The consumer aspect is the more dynamic one,” said Nauckhoff. “For us as an investor in Italian global brands, it is a very interesting market for us … They do have a high standing.’”

The firm will also explore potential for a local investment platform in China in the longer term. However, Nauckhoff said the company will focus on organic growth and M&A opportunities for its investees. They could also branch out into supporting Chinese investments into Europe, working with Asian acquirers. “In our history, we’ve traditionally sold to strategic buyers,” he told AVCJ. “We do expect the area of growth to be Asian strategic buyers.”

Investindustrial recently closed its Investindustrial IV fund at 1 billion euros ($1.36 billion), with new investors Adams Street Partners, Alpinvest, AXA Private Equity and HarbourVest Partners, joining existing LPs Adveq, ATP Private Equity Partners, New York Life Insurance Company, Princeton University, and Wilshire Private Markets Group, as well as one Asian government-backed fund. 

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