Mahon China assists investors to realise value from stressed assets and stalled private equity funds in mainland China.

We also advise foreign companies on market entry and growth strategies, help them to acquire assets, identify and assess partners, and forecast the Chinese economy.

The highest virtue is like water: it benefits everything without exciting rivalries. We should be like water. Laozi, fifth century BC

About us

Mahon China is a partnership based in Beijing and operating throughout China.

Chinese high-speed train, Nick May

Mahon China was founded in 1985 by New Zealander David Mahon, and was a pioneer of private equity (PE) in the mainland. Mahon China managed four PE funds which achieved a net return of 34% for investors, and is currently General Partner of a fifth PE fund.

We assist investors to restructure and exit from special situations in China, be they stalled funds, single assets, stressed equity investments or nonperforming loans.

Mahon China also advises multinationals and small/medium enterprises on their China strategies. Our expertise includes China’s agriculture, food & beverage, specialised manufacturing and services sectors.

Meet the Mahon China team.

Realising returns

Mahon China maximises returns for investors through restructuring and exiting their investments.

Greenhouse in Hangzhou, Andy Brandl Vegetable market vendor, Andy Brandl

Many China-invested private equity (PE) funds and foreign direct investments in Chinese companies established over the last eight years are now struggling for exits.

Mahon China has helped clients — including Limited Partners of funds, development finance institutions and banks — exit and realise value from more than 20 foreign investments in China.

Mahon China began managing China-focused PE funds in 1992, as one of the country’s first PE fund managers.
We have managed five PE funds, ranging from single-investor and traditional GP/LP-structured funds to listed investment companies with more than 1400 shareholders in multiple jurisdictions.

Mahon China is currently General Partner of a PE fund for European and North Asian public- and private-sector interests. We also manage a range of direct investments on behalf of large institutional investors.

> Mahon China developed a plan to restructure and recapitalise a diesel engine manufacturer to allow the company to buy out the fund’s equity stake. The company relocated and shifted its product focus to diesel-engine power supplies, which are now sold throughout China and in 10 export markets.

> Mahon China helped a large steel manufacturer to develop and introduce higher-margin products into the market, which the company supplied to VW and General Motors. With Mahon China’s assistance, the steel company’s profits grew seven-fold in two years. Mahon China sold its equity stake when the steel manufacturer was granted initial listing approval.

> Mahon China negotiated an exit from an investment in a major condiment manufacturer by leveraging the company’s breaches of contract. The exit constituted an IRR of approximately 22%.

Corporate advisory

China remains an opaque and complex market in which to do business and make investments.

Suntech worker in Wuxi, Lucas Schifres
Solar panels in Urumchi, Philip Game

Mahon China draws from its own hands-on experience in making and managing investments in China to assist companies in developing and executing their strategies.

We offer:

• Development of China market entry and expansion

• Sector research and niche identification

• Assessment and establishment of Chinese teams

• Identification of partners

• Due diligence

• Fundraising

• Deal acquisition and structuring

> Mahon China has facilitated client investments in excess of USD 150 million in sectors ranging from agriculture and food & beverage to technology and services. We have assisted foreign companies to acquire land and other assets in major cities and remote rural areas.

> Mahon China played a key role as crisis advisor for Fonterra during the 2008 melamine incident.

> Mahon China successfully engaged in arbitration on three occasions on behalf of its foreign clients.

> Mahon China advised a Chinese city to identify international partners for its development project and has assisted Chinese companies to acquire assets globally.

Our team

Mahon China’s team is based in Beijing, with partners in the UK and Australasia.

David Mahon

Executive Chairman

David provides strategic leadership for the team, from deal origination to negotiations with potential exit partners.

• Managed five private equity portfolios in China and held direct responsibility for the management of over 20 Chinese companies

• Served on the boards of international and Chinese financial and industrial firms

• Advised multinationals entering and growing in the Chinese market, and forecasted the Chinese economy for three decades

• Writes and publishes China Watch, a quarterly review of China’s political and economic developments; regular commentator in the Chinese and international news media

• Resident in China since 1984

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Charlie Gao

Managing Partner

Charlie manages the company's investment and advisory practices.

• Developed and successfully implemented exit strategies for the Chinese direct investments of European financial institutions

• Advised international clients in sectors including professional services, technology, agriculture, and food & beverage

• Formerly with APCO’s investment practice and the New Zealand Centre at Peking University

• BSc (biological and computer sciences), BA (Hons) and MA (Hons) (political economy) from the University of Auckland; speaks English and Mandarin as first languages

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Mei Xiaorong

Partner

Ms Mei manages Mahon China’s private equity funds business, is a core member of the investment practice, and handles legal and accounting compliance.

• Developed and successfully implemented exit strategies for a range of special situation assets

• Undertook due diligence across sectors including logistics, textiles, infrastructure, and specialized manufacturing

• Originated and managed a private equity fund focused on the retail industry; possesses over 20 years of experience in Chinese private equity with Mahon China

• Prior experience with one of the earliest Sino-foreign joint ventures in China, and Inchcape

• Postgraduate finance and economics degree from Capital University of Economics and Trade

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Zhang Yike

Senior Partner

Yike leads Mahon China's engagement with Chinese officials and stakeholders, and is an experienced restructurer and manager of factories.

• Member of the Mahon China team since 1995, beginning in the role of investment manager

• Formerly president and general manager of Furniture Origins Group Co., and chief operating officer of Hendrix Corporation, a US-listed electronic equipment company. Managed factories employing more than 3000 workers around China

• Served as chairman of the board for Aoqi Shoes

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Jessie Sui

Partner

Jessie is a core member of Mahon China’s investment and corporate advisory practices.

• Co-ordinates and negotiates with key stakeholders to develop and execute exit strategies for fund and direct investments

• Tracks company operations and monitors industry and competitor data for assets under management

• Recommends market entry and growth strategies for international firms

• Formerly managed a team of 16 specialists at Thomson Reuters’ financial information division, providing financial research and data analysis for investment banking clients

• BA (commerce) from Birmingham University; MSc (accounting & finance) from the University of Bath

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XY Zhang

Chief Financial Officer

XY ensures the accounting and tax compliance of Mahon China and its funds, and develops financial strategies to provide stability and improved efficiency.

• Oversees accounting compliance for funds managed by Mahon China

• 30 years’ global accounting, audit, tax, and financial management experience within and outside China

• Formerly CFO of McDonald’s China, audit director at the largest Chinese CPA firm, and a senior business consultant with Arthur Anderson

• MA from the PRC Finance Ministry Institute

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Hugh Swire

Partner (EU)

Hugh represents Mahon China’s interests in the United Kingdom and Europe.

• Director of Water Powered Technologies Ltd, a company that designs and supplies zero energy pump products

• Oversaw manufacturing companies in Mahon China’s private equity portfolio

• Managed listed equities for Nomura in Tokyo

• Previously vice president specialising in equity derivatives at JP Morgan in London

• Graduated from Oxford University with degree in modern and classical Chinese

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Ming Chou

Advisor

Ming monitors and analyses China’s dairy, agriculture and FMCG sectors for Mahon China’s advisory practice.

• Conducts macroeconomic and sector research, analyses company financials, and carries out competitor and risk analysis

• Tracks regulatory developments and consumer trends in China for advisory clients

• Formerly associate portfolio manager at SFP Investment Advisors

• BA (Hons) from the University of California at Irvine

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Huang Jingjing

Investment Manager

Jingjing manages Mahon China’s third-party service providers, undertakes research, oversees project logistics and develops new business opportunities.

• Advises foreign companies on regulatory compliance in China

• Conducts due diligence and research in sectors which include agriculture, food & beverage and retail

• Manages third-party advisors in an administrative role

• Works with team members and clients to arrange project logistics

• Accounting degree from Lianhe University

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Candy Wang

Executive Assistant

Candy is executive assistant at Mahon China.

• Provides logistical and administrative support to the partners

• Supports the commercial activities of the wider team

• BA from Hebei University of Economics & Business

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China Watch

Summer-Autumn 2016

Issue #113

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China Watch

China Watch is a quarterly review of the Chinese economy and evolving business environment, written by David Mahon.

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Centeredness is the cure for impulsiveness.
Serenity is the master of restlessness.

Laozi, fifth century BC