ICG and Goldman back Chinese spin-out

ICG and Goldman Sachs Asset Management have backed the spin-out of a Chinese conglomerate’s captive private equity team.

The firms provided $325 million to support the acquisition of a portfolio of assets managed by private equity firm Aretex, according to a statement. Aretex was the captive private equity team of Chinese investment firm ZZ Capital International and spun out as a result of the deal, according to a source familiar with the matter.

Park Hill Group advised Aretex on the transaction.

ICG invested in the deal through its strategic equity unit. It is unclear which funds Goldman used to back the transaction.

The portfolio comprises three assets, the largest of which is Dallas-headquartered Alerian, which produces benchmarks and indices for the energy industry. The sale of Alerian to the ZZ Capital team was agreed in June 2017, according to a statement from ZZ Capital.

The imposition of capital controls restricting the outflow of US dollars by the Chinese government meant that ZZ Capital discontinued its overseas private equity programme and the deal was not closed until ICG and Goldman intervened, Secondaries Investor understands.

ZZ Capital’s private equity team was founded by Sergio D’Angelo and Andrew Feller, of KKR and Metalmark Capital respectively. They joined in 2016, according to their LinkedIn profiles, and officially spun out to create Aretex in June.

ZZ Capital International was formed in 2011 and has more than 40 billion yuan ($6 billion; €5.2 billion) in assets under management, according to its website. The firm is listed in Hong Kong under the name Zhongzhi Capital.

ICG is currently in market seeking $1.6 billion for its latest dedicated secondaries fund, Secondaries Investor revealed in April.

Goldman Sachs’ Vintage VII secondaries fund raised $7.12 billion by final close in July 2017, according to PEI data.