NEW YORK, Jan 11 The Blackstone Group said it plans to open a private equity office in Ho

NEW YORK, Jan 11 (Reuters) The Blackstone Group said it plans to open a private equity office in Hong Kong to expand its investing in the Asia-Pacific region.

Blackstone said Antony Leung, who was financial secretary of Hong Kong from 2001 to 2003, joined the firm as a senior managing director and chairman of Blackstone Greater China.

Leung will co-head Blackstone's Hong Kong office along with Ben Jenkins, a senior managing director, who will relocate with a team from New York.

Blackstone's move into the Asia-Pacific region comes after several of its private equity rivals, such as Kohlberg Kravis Roberts&Co. and Bain Capital, flocked to the region seeking to capitalize on its booming economy.

New York-based Blackstone originally hitched its Asia wagon to India, opening an office in Mumbai in 2005 and dedicating $1 billion to the region. Executives at the firm saw more opportunities there than in China and Japan.

But Blackstone now has its deal-making sights further east.

''We are impressed by the impact of the economic reforms that have been taking place in the world's fourth-largest economy and elsewhere in that region,'' said Stephen Schwarzman, Blackstone's chairman and chief executive, adding the firm has its eye on not just China, but the entire Asia-Pacific region.

Reuters was the first to report Blackstone planned to expand its buyout practice into the Asia-Pacific region. To read the story, please click on ID:nT297883.

The New York-based firm opened a fund of funds office in Hong Kong this year to provide marketing and support for its $12.4 billion alternative asset management business.

The main focus of the expanded Hong Kong office will be sourcing new private equity transactions, but Blackstone said it would also help its existing portfolio companies entering or expanding in the region.

China's booming economy and huge consumer market is one of the key elements attracting U.S. buyout firms to the region.

Private equity firms buy companies and sell them later.

They pay for deals with about one-third of their cash and borrow the rest in debt on behalf of their target companies.

In the first nine months of last year, private equity firms raised $1.7 billion for China investments, four times the amount raised in the same 2004 period, according to the Asia Venture Capital Journal. Buyout firms invested more than $4 billion in China in the first nine months of last year, compared with only $723 million in 2003, according to Dealogic.

Another factor pulling foreign investors to China is that the deal market in the United States and Europe is getting overheated and they are looking to invest billions in less concentrated areas.

But private equity firms have so far found that regulatory concerns and foreign investment resistance has made investing in places such as China and South Korea far from easy.

Blackstone said it plans to build its Asia-Pacific presence by drawing on staff from its U.S. and European operations, as well as hiring local professionals. The firm said it may open more offices in the region as its business grows.

Before he was Hong Kong's financial secretary, Leung was chairman of Asia with JP Morgan and previously worked at Citicorp in various positions, Blackstone said, adding that Leung is on the boards of other companies, including Industrial and Commercial Bank of China.

Reuters DKS VP0515