Good Resources, Bank of China set up $5b global M&A fund

Good Resources will own a 51% interest in the GP, with Bank of China holding the rest, according to a regulatory filing. There was no information on how much capital each party would contribute to the fund or how they would go about sourcing third-party investors.

The vehicle - BOCHK and Good Resources Global Merger and Acquisition Fund - will target leading companies in emerging industry sectors around the world, such as finance and investment, clean energy, biopharmaceuticals and life science, bulk commodities, and internet finance.

Areas of interest also include industries that are expected to benefit from China's "one belt, one road" strategy. This refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative proposed by China in 2013, which aims to build roads, railways, ports and airports across countries in Asia, Europe and Africa. Several state-controlled funds have been set up with a similar investment remit.

Good Resources has already participated in one notable outbound private equity deal, supporting a consortium led by Go Scale Capital - which is sponsored by VC firms GSR Ventures and Oak Investment Partners - in its acquisition of the Lumileds LED business from Dutch electronics giant Philips at a valuation of $3.3 billion.

Good Resources contributed $93 million to a vehicle called GSC Special Buyout Fund. It was set up to pursue cross-border investment opportunities, including the acquisition of Lumileds.

Cheng has previously collaborated with GSR and Go Scale on other investments, including Lattice Power and Boston-Power. When Go Scale announced in July that it had raised $1 billion for a cross-border buyout fund - which it hopes will translate into $5 billion worth of dry power once debt financing and co-investment are factored in - it soon emerged that Cheng was an investor. Good Resources will offer support on all M&A deals, as well as co-investing in certain transactions.

Good Resources had cash and cash equivalents of HK$687.9 million ($89 million) as of June 2015. The company said in its most recent annual report that supporting corporate China's "go out" strategy would be a key priority. It claimed to have been in active negotiations on projects relating to internet finance, the "one belt, one road" initiative, and LED lighting.

Good Resources said it had also attracted interest from overseas and domestic capital.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Fundraising
• Greater China
• Cleantech
• Financials
• Healthcare
• China
• Fundraising
• M&A
• Outbound investment
• Cleantech
• Financial Services
• healthcare