April 9th 2013 – Dow Jones LBO wire

Amy Or | April 09, 2013

Thanks to my fellow Michigan alumni and foodies!

Detroit Electric, a maker of electric vehicles whose brand dates back to 1907, has been revived thanks to the backing of a Hong Kong private equity firm.

Detroit Electric is the first deal by the Associates, founded by former Carlyle Group Director Edward Man to make lifestyle and socially responsible investments. The company’s first commercial model, unveiled last week, is a two-seater sports car that retails for $135,000.

Its launch came in the same week as news that Fisker Automotive Inc., designer of a $100,000 sports car, said it waslaying off 75% of its 200 employees. The company has hired restructuring lawyers to explore a possible bankruptcy-protection filing.

Car buyers have yet to embrace electric vehicles, apparently put off by their high cost, unreliable performance, limited mileage and the lack of supporting infrastructure like charging stations.

Detroit Electric aims to do better with an “asset light” model in which it focuses on research and development, with the bulk of its production outsourced to other automakers and manufacturers, according to Mr. Man.

It also plans to target China, where Mr. Man said rising gas prices, pollution problems and government subsidies make electric vehicles viable. Detroit Electric is set to announce a partnership with a Chinese auto company to manufacture new models at the Shanghai auto show on April 20, he said.

“Compared to other nations, China is more technologically behind in developing and building electric cars,” he said. “They need the technology and we need the {manufacturing} platform.”

Mr. Man declined to give specifics of the deal, except that the amount invested was in the tens of millions of dollars and at a critical moment when the company was short of funds to put together the assembly plant. The company was revived by Albert Lam, a former chief executive of Lotus Engineering Group and managing director of Apple Computer in Asia.

Detroit Electric’s first model, the SP.01, has a 201-horsepower electric motor with a top speed of 155 miles per hour and a zero-to-62 miles per hour acceleration in 3.7 seconds. The company said that makes it the “fastest-ever” in its category. It has a driving range of 180 miles and can be fully charged in 4.3 hours, the company said.

The revived Detroit Electric, now housed in the Fisher Building in Detroit, has a production facility in Michigan that will have an annual capacity of 2,500 vehicles. The company expects to create 180 manufacturing and sales-related jobs.

Detroit Electric originally produced electric automobiles powered by rechargeable lead-acid batteries. It catered to women drivers and physicians, whose hands were thought to be too delicate to crank engines, the normal method of starting a vehicle in the early 1900s.

The company only endured for 32 years until 1939, producing 13,000 vehicles that were sold to the likes of Thomas Edison and the wives of President Dwight D. Eisenhower and Henry Ford.

At Carlyle, Mr. Man focused on buyouts and minority investments in China, including the private equity giant’s first Chinese investment, department store chain Pacific China Holdings Ltd. He was actively involved in Carlyle’s Asian buyout fund and its renminbi-denominated fund.

The Associates doesn’t plan to raise a fund, raising capital on a deal-by-deal basis, and Mr. Man said it only accepts capital from investors with a strong belief in the companies it backs. The Detroit Electric limited partners are his fellow University of Michigan alumni, who he said are deeply acquainted with both Detroit the city and its auto industry.

For the Associates’ second investment made earlier this year, Spanish restaurant Catalunya in Hong Kong, Mr. Man rounded up a group of foodies who are into wining and dining.

Like Detroit Electric, Catalunya has an interesting past. The 5,000-square-foot restaurant, which just opened in Wan Chai late last month, boasts a culinary team from Spain’s Michelin three-starred Catalonian restaurant El Bulli, which closed in 2011.