OCTOBER 8, 2008, 5:06 A.M. ET Bohai May Tap China Life Official for CEO Post
By RICK CAREWArticle
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HONG KONG -- A senior official at China Life Insurance Co. is the leading candidate to become chief executive of China's highest-profile domestic private-equity fund, according to people familiar with the matter.
If an agreement is reached, Liu Lefei, currently China Life's chief investment officer, would succeed Au Ngai as CEO of Bohai Industrial Investment Fund Management Co., these people said. One of these people said a formal agreement hasn't been reached and that Bohai's board has yet to vote on the appointment. A China Life spokeswoman declined to comment.
The investment-banking arm of Bank of China Ltd. set up the Bohai Fund in 2006 to create a model for the growth of a domestic private-equity industry. To date, overseas firms like Carlyle Group and TPG have dominated the country's private-equity scene. The Bohai Fund raised local currency from a range of state institutions including China Life and hired Mr. Au away from TPG to put that capital to work. So far, the Bohai Fund has invested nearly one-third of the 6.1 billion yuan ($892 million) it raised.
China is keen to build a domestic private-equity industry to limit inflows of foreign capital and keep control of local companies in Chinese hands. Private-equity remains a tiny fraction of overall fundraising in China, which is dominated by initial public offerings. The efforts so far have hit some stumbling blocks as government officials debate how to regulate the industry and conflicting agendas prevent new funds from raising cash from big institutional investors domestically.
The politically connected Mr. Liu, born in 1973, has served as China Life's investment chief since July 2006 and was responsible for negotiating a number of key investments made by the country's largest life insurer by premiums. Its investment in Visa Inc.'s initial public offering marked a rare overseas financial investment made by China that has performed well.
He also has participated in a number of important deals including buying 20% of Guangdong Development Bank as part of a consortium led by Citigroup Inc. Mr. Liu represents China Life on the bank's board. Prior to his tenure at China Life, Mr. Liu has worked for a local Chinese securities firm among other ventures.
The Bohai Fund's previous CEO, Mr. Ngai, resigned in July from the fund and a number of other more junior staff have left. It is unclear what Mr. Ngai's next venture will be.
Write to Rick Carew at rick.carew@wsj.com
Thursday, October 9, 2008
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