US private equity giant KKR has brought in a new head of Greater China, as it shifts into fundraising mode and broadens its China investment scope to include cross-border M&A and state-owned-enterprise restructuring.
Paul Yang, currently chief executive of Taiwanese merchant bank China Development Financial Corporation (CDFC), will join KKR in January. He replaces David Liu, who is leaving to found a new PE firm. Based in Hong Kong, Yang will lead a 20-strong team of professionals in Beijing.
The hire rounds out KKR’s Asian deal team as the New York-based manager sets itself a target of $7 billion for its third Asia fund, said people familiar with the matter. Zhen Ji also joined as a managing director of KKR China from Citic Capital along with Rob Yang in May.
Joseph Bae, KKR's Asia managing partner, laid out the revamped strategy for China: “We plan to continue to expand our scope of investments to include more mid-cap buyouts, cross-border deals and opportunities related to the domestic consolidation there, as well as in continuing to participate in growth-oriented investments."
Private equity background
At CDFC, Yang supervised the group’s investments and led a team of 7,000 people across its operations in Bangkok, Hong Kong, Jakarta, Seoul, Shanghai, Singapore and Taipei.
Having joined the bank in 2005 as its chief investment officer and head of private equity, he was promoted to his current role in 2011. During his tenure there, Yang restructured the then-proprietary private equity operation into an asset management franchise.
Before moving to CDFC, the Taiwan native worked at Singaporean bank DBS as its head of private equity for four years.
He started his career in finance at Goldman Sachs, serving as the bank's representative on what was a three-strong board at Chinese e-commerce giant Alibaba after it put together a $5 million investment in the then-nascent company.
Since entering Asia in 2005, KKR has completed some 60 PE transactions across the region with a cumulative investment of around $10 billion.
KKR's current $6 billion Asian Fund II – the largest PE fund raised in Asia, which closed in July 2013 – is generating a gross internal rate of return (IRR) of 36.2% and a net IRR of 24.8%, according to its most recent filing to the US Securities and Exchange Commission.
KKR Asia Fund, vintage 2007, has an IRR of 13.4% and multiple of 1.6 times, according to private equity investor California Public Employees’ Retirement System. Meanwhile TPG Asia V vintage year 2007 is generating a net IRR of 4.6% and investment multiple of 1.2%.