$100M Invested in China-Focused Vulture Fund

HONG KONG-The private equity firm Colony Capital Asia Pacific Pte Ltd. and a unit of Shanghai Industrial Investment Corp. have jointly sponsored the Yangtze Special Situations Fund LP, the first China-focused fund targeting non-performing loans, distressed assets, and distressed companies and financial institutions. The fund recently had a first closing of approximately $100 million in equity.The equity is coming from the International Finance Corporation and Asian Development Bank as well as other international financial institutions. The International Finance Corporation also will participate in the fund’s general partnership. The fund is targeting total equity commitments of $500 million and will leverage the funds to increase its buying power. The investments will be sourced and managed by Los Angeles-based Colony Capital and China-based professionals of Hong Kong-based Shanghai Industrial. Colony Capital has invested more than $600 million in over 3,500 assets in China since 1998. “The Chinese government and business community are aligned in their determination to rectify many of the nation’s non-performing and inefficient assets,” says Colony Capital CEO Thomas Barrack, adding that Shanghai Industrial is has “significant government and business relationships that will be crucial in the process.”