Themes Investment Partners, founded by former Och-Ziff Capital Management Group LLC executive Frank Yu, said it agreed to invest more than $100 million in Standard Water Group, a wastewater treatment company in China.
Themes Partners and a group of investors will own more than 50 percent of the Beijing-based company after the transaction, with Standard Water management holding the rest, Yu said in an interview today. Yu, 40, said he plans to sell shares in the company in an initial public offering within a year.
Yu, who worked at Goldman Sachs Group Inc. for almost a decade, left his position as Och-Ziff’s head of China investments in June 2009 to start Themes Partners, a private- equity fund focused on environmental, agricultural and financial companies. The Standard Water Group deal, scheduled to be completed in January, is the first for Themes Partners.
Waste water treatment “is a defensible business enjoying a steady recurring cash flow over a 25-year period, but also coupled with fast growth driven by pressing needs in China,” Yu said in a press release.
China, the world’s worst polluter, needs to spend at least 2 percent of gross domestic product a year —680 billion yuan ($102 billion) at 2009 figures — to clean up 30 years of industrial waste, according to He Ping, chairman of the Washington-based International Fund for China’s Environment.
Buy out investors
Yu said the investing group will use about two-thirds of the capital to buy out existing investors including Singapore- listed CNA Group Ltd., and the remainder for the water company’s expansion.
CNA, a supplier of building-automation systems, said on Dec. 1 that it agreed to sell its 49.9 percent stake in Standard Water. The sale incurred a S$15.8 million ($12 million) loss.
An infrastructure fund of Standard Chartered Plc also bought senior secured notes issued by Standard Water, CNA said.
Closely held Standard Water Group operates 30 plants in 13 provinces in China and has a daily wastewater treatment capacity of 1.5 million tons, according to the release. Standard Water Group officials didn’t immediately respond to calls seeking comment.
