Frank Tang, managing partner and co-founder of Hong Kong–based private equity firm FountainVest Partners, believes the smart move in today’s volatile markets is to bet on China’s booming middle class. In the past year Tang has raised close to $1 billion for a fund that will invest in Chinese companies that cater to the nation’s 400 million middle-class consumers. It is the second-largest fundraising for a China-focused private equity fund in 2008, after the $2 billion raised by Fang Fenglei, chairman of Goldman Sachs Gao Hua Securities, which is Goldman, Sachs & Co.’s joint venture partner in China. “This generation will build the new corporate giants — the Chinese versions of the Wal-Marts of tomorrow,” says Tang, 40, who was born in Shanghai and has an MBA from Columbia Business School. Some with deep pockets agree. The fund’s major investors include Canada Pension Plan’s CPP Investment Board and Singapore’s Temasek Holdings.
