Standard Chartered leads $124m China development deal

The private equity arm of Standard Chartered, a Chinese institution and an Asian family office have purchased a 28 percent stake in a Chongqing project.

Standard Chartered Private Equity (SCPE), the captive private equity investment arm of the London-based bank, has led a $124 million investment in a mixed-use commercial development project in the Chinese municipality of Chongqing, according to a firm statement. SCPE itself put up about $64 million of the capital, while a Chinese institutional investor and an Asian family office committed the rest. Altogether, the consortium now has a 28 percent stake in the project, which is being developed by Hong Kong-listed developer Longfor Properties.

The mixed-use project is located in one of the main business centers of Chongqing, China’s most populous municipality. The 3.4 million-square-foot development comprises small office/home office (SOHO) units, traditional office space and supporting retail.

Longfor Properties also is a client of Standard Chartered Bank. Joe Stevens, global head of principal finance at Standard Chartered Bank, said in the statement that SCPE was particularly focused on the developer’s 'reputation' and ability to execute. “We look forward to adding value at each strategic stage of the project together with the local team,” he said.

The vast majority of SCPE’s investment activities are in the private equity space, specializing in Asia, Africa and the Middle East. The firm invests off of Standard Chartered’s balance sheet and, to date, has invested $5 billion in more than 100 companies.

Last year, however, Standard Chartered announced plans to restructure SCPE, intending to bring its headcount down to 100 and streamline its investment business to a narrower focus. In December, the firm reportedly lost its co-head Alastair Morrison and three managing directors.

SCPE is one of the few managers to bet on the China market recently, as the slowing economy and slowing property sales have made most investors cautious. That said, CBRE Global Investors was able to raise $470 million for a China-focused opportunistic fund last month.