(China Alert) The USD350m China fund deal

– A 10% stake in ChinaAMC has been bought by Power Corp’s subsidiary IGM Financial
– Power Corp has made over USD100m in profit from its original 10% ChinaAMC stake in five years

Update: Canada’s Power Corp is doubling-down on its China investment. It has acquired another 10% of ChinaAMC through its publicly-traded subsidiary – IGM Financial. This gives Power Corp an effective 20% share of one of China’s largest fund management companies (FMC). And this may increase further. The RMB2.4bn (USD345.3m) price tag makes it the largest ever deal in the domestic FMC industry, but Power Corp has already made over USD100m on its initial 10% stake through both capital appreciation and dividends received since 2011. Z-Ben Advisors believes this deal highlights that taking calculated risks in China can pay off handsomely for those willing to take them.

Z-Ben Analysis

What other foreign firm has made anywhere near USD100m over the past five years in China? Very few would be the answer and perhaps …

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