Tan said he intends to leverage his experience working in private equity to help other Chinese investors – including private equity firms and high net worth individuals – source deals in Europe.
The new company, which is called Arion Capital, is based in the City of London. It will focus on sourcing businesses in the financial services, consumer, medical technology and agricultural technology sectors, and provide consultancy services to help manage investments post-acquisition.
Technology and consumer businesses are particularly appealing to Chinese buyers, because there is huge demand for their products from a rapidly increasing Chinese middle class with growing disposable incomes, Tan said.
Tan has almost a decade of experience working for investment firms in the UK. He left investment bank Lehman Brothers in 2008 to join a UK-based private equity firm founded by his former colleague Jeremy Isaacs CBE, the former European chief executive at the bank, called JRJ Group.
In 2014, Tan left the private equity firm to head the UK operations of Fosun, a Chinese investment group backed by billionaire Guo Guangchang. At Fosun, Tan specialised in deals in the financial services sector.
Fosun invested in European holiday operator Club Med and UK football club Wolverhampton Wanderers while he was at the group.
Chinese investment in European companies has risen 223% in 2016 so far, according to Clifford Chance’s 2016 Global M&A Outlook Report.
Mega deals involving Chinese buyers this year include the purchase of a 61% stake in National Grid’s gas distribution business by a consortium backed by Chinese sovereign wealth fund China Investment Corporation. The deal valued the business at £13.8 billion.
Tom Whelan, head of private equity at law firm Hogan Lovells, said there was a “clear message” among attendees at the AVCJ annual Private Equity & Venture Forum in November 2016 that Asian investors are looking to invest in different sectors across Europe and the US.
Chinese private equity firms are growing their presence in London to increase their scope to invest in Europe. FN’s sister-paper, Private Equity News, reported in November that Chinese investment firm ZZ Capital had opened up a London office and hired a former dealmaker from buyout giant KKR.