Noah eyes $2.8b China real estate fund
Noah Holdings, the Shanghai-headquartered third-party financial advisory company, is seeking to launch a real estate fund worth as much as RMB18 billion ($2.85 billion). It will target cash-strapped developers who are seeking new sources of funding.
According to local media, the fund will be raised in partnership with Chinese real estate services company E-house, with cornerstone investors expected to contribute RMB1 billion. Leading Chinese developers include the likes of Evergrande, R&F Properties and Huayuan have already expressed interest. Sources familiar with the situation confirmed the details to AVCJ.
The news comes at a time when Chinese government shows little sign of relaxing the tough credit market, with banks putting challenging restrictions on property loans. Chinese developers have been seeking alternatives to bank lending, creating opportunities for private equity funds.
Founded in 2005, Noah is listed on the New York Stock Exchange and counts Sequoia Capital, which first invested in the company in 2007, among its shareholders.
The company distributes fixed income and fund-of-funds products to enterprises as well as wealthy individuals. Its renminbi-denominated fund-of-funds are valued at RMB3.3billion and the total investment from these funds reached RMB1.6 billion as of 2011.
"During fundraising, we always targets investors with investible assets of over RMB10 million," Jingbo Wang, founder of Noah, told AVCJ in February on the company's fundraising practices. "Around 70% are entrepreneurs who wish to allocate part of their asset portfolios, maybe 20% to 30%, into private equities."
Noah's registered clients - both individual and enterprise - have grown from 930 in 2005 to 27,144 last year. The company has distributed over RMB47.4 billion worth of wealth management products since 2005.
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