TPG invests in Chinese shoe retailer

TPG Asia, the Asian arm of private equity firm Texas Pacific Group, has agreed to buy Rmb550 million $80 million worth of convertible bonds in Chinese shoe manufacturer and retailer Daphne International Holdings, which will give it a 9.8% stake in the company once fully converted. The deal also includes 100 million warrants, and if they too are exercised, TPG's holdings will increase to 14.5%.

The company will use the money as working capital and to expand its retail network in China. However, the deal has wider implications than just a fund raising tool. Daphne will treat TPG as a strategic investor and will expect the US company to share its business...