The European-based private equity firm Permira is planning to set up an office in Shanghai or Hong Kong to prepare for direct investment in China, eyeing the country's growing market.

Paolo Colonna, chairman of Permira, told Shanghai Securities News that the firm intended to invest in merchandise distribution for China's big- and medium-sized enterprises with its worldwide sales network.

Marazzi, a ceramic tile company with investment from Permira, is already selling Chinese-made tiles in the Far East.

Permira was no longer satisfied with indirect investment in China, according to Paolo Colonna.

Permira normally becomes a company's biggest shareholder when it invests in Europe. Paolo Colonna said the firm is now seeking to become majority investors in Chinese companies, but emphasized it would not meddle in the operation of companies.

He also said his firm sees the potential for growth in both publicly and privately owned companies.

China has seen more private equity coming into the country with the rapid growth of Chinese enterprises. The U.S. investment group Warburg Pincus said private equity investors in China pumped 1.07 billion U.S. dollars in 2005 up from about 518 million U.S. dollars in 2001.

Source: Xinhua