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Hong Kong: L Capital Asia, the private equity arm of the world's biggest luxury goods group LVMH Moët Hennessy Louis Vuitton SA, could begin raising a new fund of more than $1 billion this year, as competition from Western brands creates opportunities to invest in Chinese retailers, its top executive said.


"The reason we want to do a larger fund next time is primarily because opportunities in the segment are huge, and we see larger and larger companies coming to us," Ravi Thakran, managing partner of L Capital Asia, told Reuters in a telephone interview on Thursday.

He said Chinese retailers faced rising competition from Western brands such as Abercrombie & Fitch Co (ANF.N) and Gap Inc (GPS.N), which are expected to push quickly into the country's second- and third-tier cities.

This was creating a need to protect homegrown brands, and increasing investment opportunities for L Capital, he said.

L Capital Asia recently headed a consortium to invest $200 million in China's Trendy International Group, valuing the family-run fashion company at about $2 billion.

Thakran said expansion of the company into Hong Kong, Macau, Taiwan and the emerging markets of Southeast Asia was part of the investment plan, but the need to protect the brand on its home turf was also a significant part of the deal.

"International expansion is really secondary to the whole play," he said. "The primary purpose is to protect the mainland market, protect market share, build brand equity further, be ready to take on this competition."
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