PAG joins $500m investment in Hong Kong's Kingston Financial
PAG Asia Capital's absolute returns business has joined a consortium that plans to invest HK$3.87 billion ($500 million) in Hong Kong-based investment firm Kingston Financial.
The consortium also includes hedge fund Quantum Enhance Fund, Dalian Wanda Group, and Chow Tai Fook Nominee, which is controlled by Hong Kong billionaire Cheng Yu Tung.
Kingston, which provides a wide range of financial services from securities trading to corporate finance, said in a filing that it plans to sell 1.76 billion shares at HK$2.20 apiece, which represents a discount of 38.2% to the closing price of HK$3.56 on the last trading day.
Quantum has agreed to buy the biggest stake of 4.58%, subscribing 704.5 million shares. The remaining 1.06 billion shares will be divided equally between PAG, Chow Tai Fook Nominee and Wanda Investment, with each group paying HK$775 million for a 2.29% interest. Investors are subject to a 12-month lock-up period.
Kingston plans to use the net proceeds to expand its margin finance business and IPO financial services, as well as its asset management business.
In addition to absolute returns, PAG runs private equity and real estate strategies. On the private equity side, it is currently in the market with its second pan-Asian fund, seeking to raise around $3 billion. The firm has more than $11 billion in assets under management and employs over 300 people, with offices in Hong Kong, Shanghai, Beijing, Shenzhen, Tokyo, Seoul, Singapore and Sydney.
Hong Kong's brokerage and financial advisory industry has drawn interest from PE and strategic investors.
Two months ago, a consortium led by Jack Ma, founder and executive chairman of Alibaba Group, acquired 81% of Hong Kong-listed brokerage firm Reorient Group. Last month, Gopher Asset Management, a unit of Chinese wealth management firm Noah Holdings, and Hillhouse Capital Management were among 13 cornerstone investors that committed HK$14.7 million to Huatai Securities' Hong Kong IPO.
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