China's Infant M&A and MBO Market's begin to Emerge

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JTU Capital's "cross-over" positions itself to capture China's bursting commercial and industrial activity

Within the dynamics of China's economy, there are a number of unpublicized transactions adding fuel to its economic engine. In its infant stages, mergers and acquisitions (M&A) and management buyout (MBO) opportunties will be a driving force behind's China fostering world-class companies that build their own brands and challenge foreign incumbents. China's growth is creating a myriad of new entrants in global industries that many investors have long considered to be stable and mature. With the launch of the China Event-Driven Fund, investors can now be positioned to be at the epicenter of this evolving and sustainable trend in such markets as consumer durables, communication equipment, technology, autos and auto parts, medical, consumer staples, energy, financial, capital goods, basic materials, distribution and retailing.

Many market observers have been overlooking some of the biggest long-term gainers because the near-term benefits are limited. JTU Capital's cross-over from an established venture capital firm to a hedge fund presents a unique and limited opportunity for institutional investors and ultra high-net worth individuals to participate in the world's most vibrant and productive economy.

JTU Capital Management Ltd. is a five-year Shanghai-based venture capital firm with an longstanding record of M&A and MBO transactions in China. For the period, the investment management team achieved a performance record of more than 15% net per annum since 2000. The newly created fund offers a number of competitive advantages related to deal sourcing. Aiding the fund's performance will be an experienced research team and a number of strategic relations with various government agencies.

Throughout the 1980's, a total of 6,966 enterprises were merged with USD $990 million of assets being transferred. Increasing M&A needs of both the private sector and private sector companies has skyrocketed with activity in 2004 exceeding USD $50 billion. More than 1,600 went through corporate restructuring and are listed on the Shanghai and Shenzhen stock exchanges to date. With China's accession into the World Trade Organization, the scope and scale of M&A activity is going to dramatically increase.

"We represent an unprecedented opportunity for investors by having the historical foundation, experience, market resources and insight to this segment of China's economy", stated Chen Sigen, JTU Capital's Chief Investment Officer. "With China's M&A activity projected to surpass USD $100 billion in the next few years, our investment team has the depth and supportive governmental relations to give the fund a substantive advantage in the marketplace. To further enhance investor returns, the fund will incorporate additional investment strategies to complement its overall objective," Mr. Sigen concluded.

Looking to profit from market inefficiencies related to M&A arbitrage, distressed securities, management buy-out, undervalued securities, pre-IPO investment and capital structure arbitrage, the China Event-Driven Fund investment objective is to outperform the 17.61% average return from their 2000-2004 geographical event-driven universe.

With the Chinese government laying the groundwork for entrepreneurial activity to flourish, the fund is squarely position to profit from state initiatives to stimulate its economy by encouraging entrepreneurialism at all levels and sectors within its borders. Chinese companies are making significant capital investments, beginning to employ new technology and management techniques and increasingly focusing on market-based initiatives. The government has also issued regulations granting asset management companies the authority to sell equity interests and other assets to foreign investors.

The fund will have two classes of share's. Class "A" shares will require a minimum investment of $2,000,000 and have a one-year lock-up period. No redemption fees will be applicable. Class "B" shares require a minimum investment of $250,000 and will have a redemption charge of 0% - 5%. While Class "B" shares do not have a mandatory lock-up period, a 2% annual management fee and a 20% performance fee applies to both share classes. All accounts are denominated in U.S dollars.

JTU Capital's partners include Shanghai Jiao Tong University, Shanghai SJTU Venture Capital Company Limited, Shanghai Xuhui District Government, China Agriculture Trust Investment (Hong Kong) Company Limited, Shanghai Information Venture Capital Company and Everbright Wisdom Fund Management Limited.

Registered in the Caymans, JTU Capital has elected to have PriceWaterHouse & Coopers as its auditors. HSBC in Hong Kong will serve as the fund's custodian. For more information on the fund, please contact Michael Billy, Vice-President, International Client Relations, by email at michael @, or directly at (239) 849-0538.


M. Damian Billy

michael @

(239) 849-0538


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