China Haitong Securities PE arm eyes buyout funds – report

According to the Wall Street Journal, Haitong Capital aims to raise no less than RMB2 billion ($326 million) by the end of this year for the renminbi vehicle and is targeting $200 million for the US dollar fund.

The renminbi fund will focus on domestic companies while its US dollar counterpart will invest in foreign firms with the potential to expand in China. Both will primarily operate in the consumer goods and service sector.

Several domestic institutional investors have shown interest in backing the local currency fund, including a China-listed retail firm. LP contributions for the offshore vehicle have come from individual investors in Europe, the Middle East and the US.

Securities companies have been permitted to raise private equity funds since 2006 under a pilot program closely marshaled by the China Securities Regulatory Commission (CSRC). The program was rolled out nationwide in 2011 and securities companies can now incorporate these private equity operations into their regular businesses.

Any qualified brokerage can also apply to the CSRC for a license to establish a private equity fund. However, companies will not be allowed to invest more than 15% of their own capital into private equity vehicles they set up. Furthermore, the maximum number of investors permitted in any one fund has been capped at 50.

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• Topics
• Greater China
• Buyout
• Consumer
• Renminbi fund
• Fundraising
• China
• Consumer
• buyout
• Renminbi
• Fundraising