CITIC PE to launch offshore energy fund with Canadian asset manager
CITIC Private Equity has entered into a joint venture with Canadian asset manager Sprott to set up an offshore global resources fund. The vehicle fits in with China’s strategic interest in acquiring overseas energy assets required to sustain economic growth, as evidenced by global M&A involving the country’s oil majors as well as the emergence of energy-focused GPs in the region.
The fund will focus on equities and debt instruments of global resources companies and it will be co-managed by affiliates of CITIC PE and Sprott.
"We regard this partnership to be a long-term synergistic relationship that will leverage Sprott's unique resource investment platform and CITICPE HK's investment expertise and in-depth knowledge in Asian markets," said Peter Grosskopf, CEO of Sprott, in a statement.
Chinese conglomerate CITIC Group is understood to have a minority stake in CITIC PE, which is primarily owned by company management. It has already raised one renminbi-denominated fund and one US dollar fund and is currently in the market with a second renminbi vehicle as well as a debut mezzanine fund.
Toronto-headquartered Sprott can trace its origins to brokerage Sprott Securities and currently manages approximately $10 billion in assets through four businesses: asset management, physical bullion, private equity and debt, and wealth management. The private equity and debt strategies were developed to capitalize on the firm's natural resources expertise and provide investment options to wealth management and brokerage clients.
Sprott makes equity investments in areas such as oil and gas, agriculture and agricultural nutrients; operates a lending unit that provides financing to mining and oil and gas companies; and has a dedicated mezzanine business that offers debt-based solutions to companies involved in oil and gas exploration and development in Western Canada.
According to industry sources, several managers have been pitching China outbound funds - with resources central to the investment thesis - and trying to sign up China Investment Corporation (CIC) as an anchor LP. One of the criticisms made of these purported funds is that they are run by people with little knowledge of either the geographies in which they want to operate or the assets being sought.
If there is an established model in this area it is RRJ Capital, a Hong Kong-based GP set up by Richard Ong, formerly of Goldman Sachs and Hopu Investment Management. The firm, which is understood to count CIC and Temasek Holdings among its LPs, has made a string of natural resources investments in North America.
More on Fundraising
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.