CDB to invest in MP Pacific Harbor Capital
China Development Bank (CDB) is poised to become a cornerstone investor in MP Pacific Harbor Capital, an Asian credit fund, as part of a wider initiative to take stakes in private equity and hedge funds.
MP Pacific Harbor, which was created by New York hedge fund Matlin Patterson and local lender Pacific Harbor, specializes in loans for small- and medium-sized enterprises across Asia, the Financial Times reported. Matlin Patterson was originally part of Credit Suisse's global distressed team while Pacific Harbor is led by experienced Hong Kong banker Warren Allderige.
As part of the agreement, CDB - acting through its $10 billion capital fund - would have a holding in the management company and the right to invest in deals alongside MP Pacific Harbor. It would also be able to transfer technology and send trainees to Matlin Patterson's New York office. Understanding SME lending is a key initiative among Chinese banks, which have traditionally preferred to lend to state-owned enterprises that are thought to pose less of a credit risk.
In May, CDB reportedly agreed to purchase a stake in TPG Capital, following in the footsteps of the Government of Singapore Investment Group (GIC) and the Kuwait Investment Authority (KIA).
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