Taiwan’s biggest buyout fund CDIB Capital eyes ageing tycoons for deals

Taipei City, Taiwan. Photo by Tom Ritson on Unsplash

Taiwan’s biggest buyout firm is getting ready to swoop in when Asia’s ageing entrepreneurs struggle to hand over control to a younger generation.

CDIB Capital Group is in talks with several firms in the greater China region, targeting leveraged take-private and buyout deals of about $200 million to $500 million in size. These comprise mostly of industrial-manufacturing firms listed in either Hong Kong or mainland China, according to an interview in Taipei last month with senior executives.

The group, which says it manages about $2.3 billion in proprietary and third-party capital, may also strike one or two buyouts in Taiwan this year, after privatizing specialty chemical maker Jintex Corp. in 2019.

More than one-quarter of 1.5 million small and medium-sized Taiwanese companies have at least two decades of history, and are likely to seek new ownership as their founders enter retirement. That’s according to CDIB Capital, whose president says it’s the right time for private-equity money to jump in.

“Taiwan business owners are usually older, which gives us lots of opportunities,” said William Ho, president of CDIB Capital. “Passing on the baton is a big problem as their children may not be interested in — or able to — run the business.”

CDIB, Taiwan’s first privately-run financial institution focusing on direct investments, is a unit of China Development Financial Holding Corp., according to the parent company’s website. CDIB has invested in almost 2,000 companies in Taiwan and nearly 200 companies in the greater China region, according to Ho. The company started its venture capital and PE funds business in 2013.

The group’s investments usually last about four years and target an annual return of at least 20%, added Ho. It tends to focus on deals that are too small for global buyout firms like Carlyle Group or KKR & Co. CDIB also plans to target privately-held companies.

Read: Ex-Warburg, KKR Veterans Seek $4.5 Billion for China Funds

Ho, a 25-year private-equity veteran and a former partner at CVC Asia Pacific, joined CDIB Capital in mid-2019. The group also hired Alex Ying, a 20-year Carlyle veteran, as managing director and head of the buyout group; a team of 12 people in Taipei, Hong Kong and Shanghai.

“Uncertainties such as U.S.-China trade war, and the threat from the Chinese supply chain, are increasing pressure on Taiwan’s SMEs,” said Steven Wu, executive vice president in CDIB’s private-equity business. “That’s why business owners want to talk to us. They trust us with their companies because we’ve been in the local market for a long time.”

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.