Eurazeo bullish on China’s PE investment environment

Eurazeo, a major European private equity player, said it has been bullish about the economy and investment environment in China, where the firm helps mid-sized European companies accelerate growth and tap into the booming local market.

Part of the French presidential delegation to Beijing last week, Christophe Baviere, Eurazeo’s co-chairman and CEO, said during his visit: “China is one of the most dynamic economies in the world. If you want to capture growth, you invest in China.”

Baviere said there is still room to grow in common understanding between China and Europe, and “inside Europe, France is probably a good gate for Chinese business to start to interact with Europe. Both markets — China and Europe — need to know each other better”.

Having been in China for 10 years, Eurazeo, with its Chinese headquarters in Shanghai, is one of the very first European investment firms to allocate resources and implement development strategies in the market.

The company said that it is one of the most comprehensive players in the PE market — covering small investments in the early stages to large investments in the upper-end of the mid-market, managing 34.1 billion euros ($37.2 billion) assets globally.

The core of the firm is to help companies grow faster than the industry average, Baviere said.

“We select our investments, which are among the best opportunities in Europe ... We differentiate from the competition by explaining to companies how to interact with China when they try to aim at even faster growth,” he said.

Cooperating with many Chinese institutions, such as China Investment Corporation (CIC), the company has empowered European companies by building long-term relationships to tap business opportunities in China.

In 2020, the Eurazeo China Acceleration Fund (ECAF), also known as the France-China Cooperation Fund, was launched with an initial amount of 400 million euros.

The fund, built by Eurazeo, CIC and BNP Paribas, is reaching 1 billion euros and has attracted additional investment commitments from leading investors such as New China Life and Taiping Financial Holdings.

The fund has invested in six strong portfolio companies and there will be more to come, Eurazeo said.

The beauty of the fund is to identify specific China angles of invested companies for entry into China or further development in the Chinese market, Baviere said.

He added that with an experienced China team and strong local partners, including CIC’s value creation capacity, the firm is able to raise the showings of their portfolio companies in the region.

Technology, medical devices, business services and advanced manufacturing are sectors of focus, which bode well with the future trends of development in China, the CEO said.

David Yang, head of Eurazeo China, said that as a Europeanrooted PE firm, Eurazeo, with its extensive network, rich resources and investment expertise, can partner with “invisible champions” in Europe and grow together by expanding their international footprint.

For example, with the support from Eurazeo China and its local Chinese partners such as CIC, the Dutch Ophthalmic Research Center (DORC), which was acquired by Eurazeo and ECAF four years ago, was introduced to the Chinese market, built up its local team and distribution network, and obtained local registrations. DORC is a world-leading specialist in the area of vitreoretinal surgery.

After three years, Baviere said, he is thrilled to be back in China. He said: “China is one of the largest markets and one of the most powerful economies, so there is a perception that this is a must-have in the interaction and development of businesses.

“If you have a stop-and-go strategy for China, it is a recipe for disaster. But there is a recipe to be successful in China, which is to adapt your strategy, and your interaction with the local culture and the local market. And you have to be resilient and take time with the Chinese market.”

Christophe Baviere