For TPG, an investment in Nissin Group looked attractive: it had been interested in finance firms for a long time, both in Japan and in other parts of Asia. And Nissin had something no other Japanese firm had – a presence in China, in the form of Nissin Leasing (China), a leasing firm based in Shanghai. TPG moved quickly, buying a 60 per cent stake in Nissin and its Chinese subsidiary for $275m in a deal that closed in February.
Yet instead of giving TPG a foothold in fast-growing markets, the deal now looks to be a cautionary tale. TPG's fraught relations with the former management of Nissin Leasing (China) appears to serve as a lesson about overly optimistic projections about the promise of the Chinese market and the perils of doing business with local management.
TPG is now at risk of losing its investment in the Chinese leasing subsidiary after a business dispute that led to the private equity group's executives being chased from the company's Shanghai offices.