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By Jason Simpkins
What's in a name? For HuaMei Capital Co., it's a history-making example of how U.S. and China entrepreneurs can work together and profit.
Investors from the two countries on Wednesday unveiled HuaMei, Mandarin Chinese for "China-America." But company officials promise that HuaMei will be more than a catchy name, or worse, an empty phrase. Hailing their venture as the first U.S. financial-services company to be co-owned by Chinese interests, The Associated Press reported.
HuaMei will assist with cross-border mergers and acquisitions, and offer advice on private equity investments, risk management, and proprietary trading. The company will be based in both Chicago and Beijing.
Former U.S. senator from Illinois Adlai Stevenson III will serve as co-chairman of HuaMei with Leo Melamed, the former chairman of the Chicago Mercantile Exchange. The two head a group of investors that holds a 30% stake in the company. China Merchants Securities Holdings – part of China Merchants Group – has 50% ownership, and U.S.-based MVC Capital Inc. (MVC) holds the remaining 20%.
China Merchants is a quasi-private finance conglomerate whose bank has pioneered the wealth-management and credit-card businesses in China, and ended up as the market leader in both. It is based in Shenzhen, and has 71 branch offices and 1,700 employees. And it's a member of the esteemed Merchants Group, which was organized in the 1870s.
MVC Capital (MVC) is a private equity firm – listed on the Big Board – and his headed by Michael Tokarz, a former general partner with buyout firm Kohlberg Kravis Roberts.
The venture underscores a more positive side of U.S.-China relations, which have been particularly chilly this year. The United States has repeatedly voiced its displeasure with the undervalued Yuan, China's swollen cache arsenal of foreign reserves, and product safety concerns. China has accused the United States of unfairly using the issue of safety as a way of undermining its exports.
But Melamed got right to the bottom line: "The Chinese people are our friends and they want to do business."