TPG, the global private equity group, on Friday sold slightly more than half of its 4% stake in Ping An Insurance (2318.HK) for US$1.25 billion, reported the Wall Street Journal. The sale represents a 16 times return on TPG’s 2004 investment of US$150 million for a 17% stake of Shenzhen Development Bank. Despite owning a minority of shares, TPG effectively acted to turn around Shenzhen Development Bank, installing former US Treasury Deputy Secretary Frank Newman as chairman and working to resolve lingering concerns about nonperforming loans. Following the turnaround, Ping An acquired TPG’s shares in Shenzhen Development Bank in exchange for the 4% Ping An stake. The TPG deal is one of the few instances of foreign private equity firms achieving success in the China market, where foreign investments in banks cannot exceed a 25% stake.
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