Warburg Pincus LLC is cutting about seven China dealmakers as the private-equity firm weighs scaling back consumer Internet investments, joining other finance firms in reducing staff as markets tumble and the world’s second-largest economy struggles to expand.
(Bloomberg) — Warburg Pincus LLC is cutting about seven China dealmakers as the private-equity firm weighs scaling back consumer Internet investments, joining other finance firms in reducing staff as markets tumble and the world’s second-largest economy struggles to expand.
Two partners, Vera Yang and Gordon Ding, and five more junior employees will leave the asset manager as part of the reshuffle, a person with knowledge of the matter said, asking not to be identified because the firm doesn’t comment on personnel changes. Yang and Ding couldn’t be immediately reached for comment.
“As we have done at various points over the course of our nearly 30 years of history investing in China, we have made some modest changes to the structure and size of our team to better align our organization to the evolving mix of opportunities in China,” a spokeswoman at the firm said, declining to comment on details of the changes.
Warburg Pincus joins other finance firms such as Goldman Sachs Group Inc. and UBS Group AG in cutting staff focused on China amid escalating political tension, strict Covid curbs and a broad crackdown on private enterprise. Companies such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd., once the kingmakers of China’s private sector, are now mired in next-to-zero growth after years of rapid expansion.
Markets tumbled further after China President Xi Jinping unveiled his leadership lineup for the next five years by installing loyalists in all key positions. The Hang Seng Internet & Information Technology Index has slumped almost 11% over the past five days and is down more than 50% so far this year.
Ant Group Co.’s valuation was trimmed several times by global investors who bought private shares ahead of its suspended initial public offering. Boston-based Fidelity Investments cut its estimate for the fintech giant to $70 billion at the end of May, according to Bloomberg calculations based on filings, down from $235 billion just before Ant’s IPO was torpedoed by regulators in November 2020. Warburg Pincus, an early backer of Ant, last year also marked down the value of its investment.
China-focused private equity firms are also struggling to raise new cash, hit by increased skepticism among U.S. pension funds and endowments about political and market risks in Asia’s largest economy.
Warburg Pincus’ co-head of China, Julian Cheng, is also retiring after two decades at the firm. The China team is led by Frank Wei, a more than 20-year veteran at the firm, who works with 8 other deal partners.
(Adds ANT IPO writedown in sixth and seventh paragraphs. An earlier version of the story was corrected as the surname of Vera Yang was misspelled.)
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