Alibaba: The princeling of private equity

Apr 11 2014, 20:38 IST
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Alvin Jiang has a knack for landing lucrative deals in China, the world's biggest emerging market for private equity. Reuters Alvin Jiang has a knack for landing lucrative deals in China, the world's biggest emerging market for private equity. Reuters
SummaryThe 28-year-old wears black-framed glasses perched on cheeks still round with youth.

The 28-year-old wears black-framed glasses perched on cheeks still round with youth. A discerning eye might notice the resemblance to his grandfather: former Chinese president and Communist Party leader Jiang Zemin.

Alvin Jiang has a knack for landing lucrative deals in China, the world's biggest emerging market for private equity. He is a founding partner at Hong Kong-based Boyu Capital, now one of the hottest firms in China. Boyu has attracted high-profile investors such as Asia's richest man, Li Ka-shing, and Singapore's sovereign wealth fund, Temasek Holdings Private Limited.

Founded in 2010, Boyu Capital is poised to earn big paydays from two of the most notable initial public offerings to emerge from China in the last 18 months - e-commerce giant Alibaba Group Holding Ltd <IPO-ALIB.N>, and state-backed debt trader China Cinda Asset Management Co. No other China-focused firm with such a short history has found its way into both deals.

Boyu is regarded as among the most professional operators in China private equity, with seasoned executives at its helm. But according to multiple investors, Alibaba and Cinda are not only what lures them to Boyu.

Investors were also impressed with Boyu's 2011 purchase of a controlling stake in Sunrise Duty Free - which runs all the duty-free stores at Shanghai and Beijing's international airports. That deal, they believe, provided evidence that Jiang Zemin's grandson could gain access to a strictly controlled state sector and convert those assets into a highly profitable investment.

The Sunrise investment is expected to earn a substantial exit payout for Jiang, his Boyu colleagues and investors in the firm's first $1 billion fund, people in the private equity industry say.

Whether the young private equity executive actually uses his personal connections in the way investors attribute to him remains unclear. There is no evidence that Jiang Zemin had a role in helping Boyu win a part in the Sunrise deal or in any other transaction. That hasn't stopped the belief from spreading that Alvin Jiang is tapping his family connections.

Alvin Jiang and Boyu Capital declined to comment for this story.

PRINCELING INFLUENCE

Alvin Jiang's Chinese given name is Zhicheng, which means, "with ambition, you can achieve." He is a "princeling," the relatives of current or former senior Chinese Communist Party leaders. His father, Jiang Mianheng, is also a princeling. He is the CEO of one of Shanghai's largest state-owned enterprises and is in charge of China's push into alternative nuclear energy sources.

The extensive

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