Baird Capital Partners Assists Mid-West Clients in China

Filed in archive Private Equity on September 21, 2005

Baird Capital Partners, a Milwaukee-based private equity firm, wants to make sure its small-medium sized Manufacturing clients are poised for entry into the challenging China market. Wth operations already in Hong Kong and Shanghai, they are scheduled to open another office in Beijing next month. Their mission is well, very "American."

" We want to help drive sales and distribution in China for our midwestern portfolio clients", says Gordon Pan, a managing director for Baird in their Chicago office. For sure, there are many challenges for U.S.companies, operating in China. No matter what the manufacturing scale among U.S. companies, China cannot be ignored.

While many venture capitalists are seeking deals and investment opportunities with Chinese tech companies, Baird wants to support its clients at what Pan termed, the "lower-end middle market." Baird Capital makes investments either to acquire control or finance growth of medium-sized companies - usually firms worth between $25 million and $125 million - in manufacturing, business services and even health care.

Pan refused to identify any of the specific companies during our telephone interview. But he says that their experienced team in Asia helps provide a "jumpstart" for its clients in China.

For sure, Baird's strategy is to protect their portfolio companies and for most reducing manufacturing costs is a key component of the China rationale. However, it's also about strategies for selling into this huge market sometimes by even following their own OEM customers.

It's not that the U.S.manufacturers needed another wake up call but The Manufacturing Performance Institute (MPI), recently conducted, with Industry Week, one of the first large-scale studies of manufacturers in China, with metrics directly comparable to U.S.manufacturers. The survey shows that China's manufacturing base is younger, cheaper, more heavily invested in IT and capital equipment, focused on innovation and achieving surprising quality.