Chinese Real Estate Developer Tahoe Group To Launch $3.1B M&A Fund

Building Guiyang Zhongtian Exhibition City Guizhou

Shenzhen-listed real estate developer Tahoe Group is planning to to establish a RMB20 billion (US$3.1 billion) mergers and acquisition (M&A) fund focused on real estate projects, according to a stock exchange filing.

The group is launching the fund with affiliate companies Tahoe Fuzhou and Tahoe Pingtan. Under the partnership, Tahoe Fuzhou will invest RMB18 billion (US$2.8 billion) to the fund, while Tahoe Group would provide RMB2 billion (US$314 million) and Tahoe Pingtan RMB5 million.

According to the filing, the aim of the fund is to build a flexible platform for equity investment and M&A by utilizing the expertise of the partnering firms. It also planning to incubate real estate projects to strengthen the company’s competitiveness, the group said in the announcement.

To capitalize on the rising cost of land in China, the Fuzhou-based developer has traditionally acquiring land through various means, such as acquisitions and equity participation. In April 2017, the developer invested RMB2 billion (US$314 million) as a cornerstone investor to participate in the establishment of Zhejiang Zheshang Industry-finance Equity Investment Fund to obtain lands through mergers.

Founded in 1996, Tahoe Group has developed residential and commercial projects in around 30 cities in China including Beijing, Shanghai, Guangzhou and Shenzhen.

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