For Private Equity, a Door Opens in China


These “first-generation entrepreneurs” — people who took advantage of the liberalization of China’s economy starting in the late 1970s — began their operations on a small scale, with modest amounts of capital. Now, their businesses are bigger, and the owners are coping with slowing economic growth, children that don’t want to take over from them and sprawling companies that require experienced managers. One example of a company that has turned to private equity is Guizhou Yonghong Food Co., which sold a $50 million stake to Lunar Capital Management Ltd., a buyout-focused firm, in April.

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