* Chinese dealmaker Cai had key role in KraussMaffei
acquisition
* His $1 billion fund to focus on Chinese deals in Germany
* He seeks to bring leading industrial technology to China
By Arno Schuetze and Denny Thomas
FRANKFURT/LONDON, Jan 15 (Reuters) - A veteran investment
banker renowned for listing some of China's biggest enterprises
is turning his sights on Germany - and seeking to help Chinese
companies snap up some of the country's coveted hi-tech
manufacturing firms.
Henry Cai - a former dealmaker for UBS UBSG.VX and
Deutsche Bank DBKGn.DE - was behind the biggest-ever Chinese
acquisition of a German company this week, when a consortium led
by state-owned China National Chemical Corp (ChemChina) agreed
to buy machinery maker KraussMaffei Group for about $1 billion.
The consortium included his investment firm, AGIC Capital,
and was a rare example of a Chinese state firm teaming up with a
private equity group.
The deal represented the first investment for AGIC, which
Cai founded last year after quitting investment banking. He is
set to close his first fund at $1 billion in the next few
months, and it will mainly focus on Chinese deals in Germany.
He is targeting deals in "innovative industrial tech" in
areas like processing technology, robotics, automation, sensors,
battery technology and environmental technology, according to
people familiar with his thinking, but did not name any
companies.
They said Cai's rationale was that by buying into German
companies - among the global leaders in industrial manufacturing
technology - Chinese firms could gain the expertise they badly
needed, and in return the Europeans could win access to growth
opportunities in China.
Cai, one of China's best connected dealmakers and for years
among the highest-paid bankers in Asia, himself told Reuters
that the two countries could complement each other.
"China and Germany have unique and natural opportunities and
synergies, that's why we set up that business model," said the
61-year-old, a keen boxer and classical music fan.
Cai studied in Shanghai before working for the city's
municipal government and Shanghai Petroleum. He made his name
working for UBS in China during the 2000s when he helped
companies like PetroChina and Fosun International list in Hong
Kong. Such deals helped earn him his industry nickname - the
"grandfather of China's capital markets".
'DOOR-OPENER'
He left UBS for Deutsche in 2010, though failed to replicate
the scale of successful deals he had enjoyed at the Swiss bank,
and is now bringing his skills to private equity - exemplified
by his pivotal role in the KraussMaffei acquisition.
"What really motivates Cai is that he sees the ability to
take German technology to China. German firms have hit
roadblocks doing business in China and Cai can act as a
door-opener, because he knows so many people and the culture," a
source close to the deal told Reuters.
Chinese companies have been steadily making acquisitions in
Europe over the past few years but state-owned enterprises,
which are slowed by often dense public bureaucracy, have lagged
more nimble private sector companies in sealing deals.
Banking sources say that in the oil and gas sector, for
example, asset purchases by state-owned enterprises can
sometimes take one to two years.
But state-owned ChemChina was able to stitch together the
KraussMaffei deal in just a "few weeks", according to several
sources familiar with the matter.
The deal saw the consortium of ChemChina, Guoxin
International Investment Corp and AGIC buy the German firm from
Canada's Onex Corp OCX.TO . ChemChina will take two-thirds of
KraussMaffei, with its partners sharing the rest.
Cai was instrumental in connecting the various parties
together, and negotiating the deal to a tight-deadline, said the
sources. He worked closely with Ting Cai, the CEO of China
National Chemical Equipment, the ChemChina unit involved in the
deal, they said.
As part of the courtship, senior KraussMaffei management
were brought to China and introduced to local government
officials and potential customers, to showcase the scale of
businesses opportunities, according to the sources.
"He is brilliant at bringing the hi-tech (industry) and the
Chinese market potential together," said one of the sources. "He
always has a million ideas."