BHR Partners (BHR Partners (Shanghai) Equity Investment Fund Management Co., Ltd) is a private investment fund founded in 2013 by Bohai Industrial Investment Fund Management Co., Ltd., which is controlled by Bank of China Limited along with a partnership with Hunter Biden, and whose focus is on mergers and acquisitions, and investment in, and reforms, of state-owned enterprise.
Business Overview
BHR was established specifically for the purpose of capital injection into Sinopec Marketing Co., in accordance with the laws of the PRC. Its registered address is China (Shanghai) Pilot Free Trade Zone and principal place of business at Unit 3101, 31/F, Tower 2, China Central Place, 79 Jianguo Road, Chaoyang District, Beijing."
BHR was one of twenty-five investors to take part in the capital injection of Sinopec Marketing Co. and their investment of approximately (US)$1.7bn dollars was the 7th largest of the group, giving them a 1.68% shareholding interest out of an available 29.99%. As part of the approved agreement, Sinopec retained 70.01%.
BHR was founded in 2013, by two Chinese-registered asset managers, Bohai Industrial Investment Fund and Harvest Fund Management, and two U.S. organisations, Thornton Group LLC and Rosemont Seneca Partners (thus the name BHR for the first initials of three of the four asset management founding firms). The Chinese registered asset managers are BOC International Holdings-backed Bohai Industrial Investment Fund Management and Deutsche Bank-backed Harvest Fund Management. The U.S. partners as a pair and the two Chinese partners each own a 30% stake in the joint management firm.
According to the Wall Street Journal, "Bohai is China's oldest private equity firm, having launched the country's first yuan-denominated fund in 2006. Harvest Fund Management is one of China's largest asset managers, with previous private equity ventures, including with a jointly held fund investing in both domestic and overseas real estate". Thornton Group is a Boston-based cross-border investment advisory firm founded by Michael Lin and James Bulger, son of former Massachusetts state Senate President William Bulger and nephew of Whitey Bulger. Rosemont Seneca is a Washington, D.C.-based investment and advisory firm, founded by Devon Archer, Christopher Heinz, and Hunter Biden, who is the son of U.S. President Joe Biden. According to The New Yorker, in June 2013, "[Jonathan] Li, Archer, and other business partners signed a memorandum of understanding to create the fund, which they named BHR Partners, and, in November, they signed contracts related to the deal. Hunter became an unpaid member of BHR’s board but did not take an equity stake in BHR Partners until after his father left the White House [as U.S. Vice President]".
Fundraising
The firm set out in 2014 to raise $1.5 billion for investments, some in dollars and some in yuan. The yuan investments were to be converted to U.S. dollars through Shanghai Free-Trade Zone, facilitating offshore investment for Chinese investors. The website said the company has "the support of Bank of China, China Development Bank Capital, and other major Chinese financial institutions. Bohai Harvest has also partnered with a subsidiary of China's conglomerate HNA Group.
Transactions
2014 - Approximately RMB4 billion in the Chinese pilot State-Owned Enterprises reform deal "involving the segregation and capitalization of Sinopec Group’s non-oil business into Sinopec Marketing Corporation"; 2015 - Henniges Automotive with strategic partner, AVIC Auto; total transaction valued at around US$600 million; Reuters reported that the "deal was subject to review by the Committee on Foreign Investment in the United States (CFIUS), and last month Senate Finance Committee Chairman Chuck Grassley raised concern about the CFIUS process, citing potential conflicts of interest." Investments in 3Bio Inc., and Didi Taxi. In November, 2016, BHR agreed to purchase Lundin Mining Corp's minority stake in African copper mine Tenke Fungurume Mining S.A. for $1.14 billion in cash. Lundin held a 30% interest in TF Holdings, a holding company, and an effective 24% stake in the mining operation. Freeport-McMoRan Inc. currently owns the remaining 70% stake in TF Holdings (an effective 56% of the mine), but is in the process of selling its stake to China Molybdenum Co. for a reported $2.65 billion. The Democratic Republic of the Congo, where the Tenke mine is located, owns the remaining 20% of the mine. According to Oxfam, "the Government of DRC knew nothing about [transaction] until after it happened." In 2017, BHR invested in a Chinese technology company Megvii.