Bridging the Gap Investor merges Western and Chinese business cultures

The road from Wall Street to the Great Wall may not have been a direct route for Jack Perkowski, but it was a fortuitous one.

In less than five years, Mr. Perkowski, chairman and CEO of Asian Strategic Investments Corp. (ASIMCO), has become one of the largest direct foreign investors in China. He has 15 joint ventures in key sectors of the Chinese economy under his firm's belt and, coming soon, two wholly owned subsidiaries.

With an aggregate capitalization of approximately $500 million - predominantly from major pension funds, insurance companies, and significant private investors from the U.S., Europe and Middle East - the ASIMCO Components Group is one of China's leading automotive components organizations.

The list of U.S. companies in China that ASIMCO is affiliated with or does business with is a virtual who's-who of Tier 1 auto partsmakers: Delphi Automotive Systems, Caterpillar, Chicago Rawhide, TRW Inc., Delco Remy Co. and Dana Corp. among them.

And there's more to come as ASIMCO sets up an auto components sales and service unit in the U.S., with plans to begin exporting Chinese-made auto parts to the new market shortly. Little wonder, then, that a subsidiary of General Electric Pension Trust - GE Investments - recently took a one-third position in the company.

Mr. Perkowski quickly notes that the GE deal has been in the works for 18 months and is not just a knee-jerk reaction to the Asia currency crisis. "We take an active management role in China," he says. "GE has a global perspective and is well known for its management. Capital was not the issue. What we lacked was a comprehensive management-training program. GE offers us the ability to tap into what they've set up."

ASIMCO's objective, Mr. Perkowski says, is to take good Chinese companies that already have attained a leadership position in the Chinese market and enable them to become leaders on the world stage.

In essence, ASIMCO affects change by identifying local management with a track record of success that understands the importance of being globally competitive and expose it to experienced Western operating professionals, who can provide access to the latest financial, manufacturing and marketing practices.

ASIMCO's staff of senior and mid-level Chinese executives help to bridge the gap between successful Chinese and Western managers. For foreign investors and those looking to do business in China, it's one-stop shopping.

Mr. Perkowski, 49, always has gone the extra mile. He received his bachelor's degree from Yale University in 1970 and MBA degree from the Harvard Graduate School of Business Administration in 1973.

He joined Paine Webber in 1973 and was the director of investment banking when he left the firm in 1988 to become managing director of a leveraged buyout firm he formed with John W. Kluge. "I always wanted to do something entrepreneurial," Mr. Perkowski says.

His competitive instincts pointed him toward East Asia. The demographics of the region, age of population and growth rate all assured him of a long-term ride there. Capital and management flowing from the U.S., Europe and Japan to Asia could make it happen, he believed. After traveling for a year through the region, he decided he would have a competitive edge by creating a direct investment company.

The next logical step was to relocate to Asia. So, in 1991, Mr. Perkowski moved to Hong Kong. "Overseas, Chinese spent the first 10 minutes of conversation talking about their business in Hong Kong," he says, "and the next 20 minutes talking about their business on the mainland. I decided that's where I needed to be."

First, he acquired two partners, one of which was an accountant fluent in Mandarin and the other experienced in assisting foreign companies in doing business in China.

Together, the trio took nine months to visit 100 factories in 40 cities. "They (the Chinese) weren't sure we could really afford to do what we proposed," he says. "We weren't a big name, and we had no annual report."

The addition of TCW Capital Investment Corp. and Dean Witter Capital Corp. as co-founding shareholders pumped $150 million into the upstart company. By August 1994, ASIMCO was setting up its first Chinese joint venture. "Once we got the first - with the Ningguo rubber products plant - others fell in line, " Mr. Perkowski recalls.

Since then, ASIMCO has developed rapidly, raising an unprecedented amount of capital for investment in China, Mr. Perkowski says, assembling an 80-person Beijing-based staff of professionals; creating an extensive network of relationships; forging strategic alliances with numerous global companies, and completing more joint ventures and investing more capital than any comparable company in China.

Despite the Asia currency crisis, Mr. Perkowski remains bullish on China's automobile industry.

China's commitment to investing in infrastructure and housing reform will lead the way to unlocking people's savings. "(Premier) Zhu Rongji is the right person for the right time," Mr. Perkowski says. "He knows how to get things done. The next five years should be a good time for China."

ASIMCO, meanwhile, will not be sitting on its collective hands. Not while 2 million tractors and 2.6 million farm vehicles were purchased by individuals last year. Not while the government estimates that some 850 million people live in rural China. "That's a whole industry no one's looking at," Mr. Perkowski says.