3i aims to close upto three China deals this year

By George Chen and Helen Ding

SHANGHAI (Reuters) - Private equity firm 3i Group aims to close two or three China deals this year with an investment focus on consumer and retail areas, but it has turned cool on the electronic media and property sectors.

Anna Cheung, a Hong Kong-based 3i p (III.L) partner, said on Tuesday that sharp declines in global stock markets this year have provided good opportunities for private equity firms such as 3i to invest in companies that need capital to support growth.

"Activities might be slower in the last 12 months partly because of valuations," Cheung told Reuters in an interview.

"In the last 12 months, people just have different valuation expectations because of the speculative nature of the (stock) market, which is not sustainable in the long run," she said.

The benchmark Shanghai Composite Index .SSEC has fallen more than 60 percent from its peak last October and is down over 50 percent so far this year, making it the world's worst performer.

"I think last year, we probably -- us and other private equity firms -- were competing with the stock market," she said.

"You find the picture quite different this year."

In China, 3i is currently focusing on the consumer and retail sectors, general industry, resources including clean and renewable energy, and healthcare, and it has also begun to look at other areas including business services, Cheung said.