Yunfeng seeks $1b for second China tech fund
Yunfeng Capital, a Chinese private equity firm established by Jack Ma and David Yu, founders of Alibaba Group and Target Media, respectively, is raising around $1 billion for its second fund. A first close of $600 million came last year and a final close will take place no later than June.
Yunfeng raised its debut fund in 2010, sourcing capital from around 20 well-known Chinese entrepreneurs - known as co-founders, although they are passive investors.
In early 2011, Yu said the firm had raised RMB10 billion ($1.5 billion) across two funds, one US dollar-denominated and the other renminbi-denominated, for investments in the tech, media and telecom (TMT), consumer and new energy spaces.
It is unclear how much capital went into each fund - or, indeed, whether Yu included separate accounts in his total - but AVCJ understands the US dollar vehicle had a corpus of $307 million.
While Fund II, which launched in February of last year, follows a similar remit to that of its predecessor - Yunfeng identifies TMT, consumer and healthcare as its main areas of focus - the investor base has evolved. According to a source familiar with the situation, the first close includes a number of global institutional investors, including sovereign wealth funds, and there are a handful of $100 million commitments.
Giant Interactive, an online game developer currently subject to a PE-backed management buyout offer, has already pledged $20 million to the vehicle.
Giant - whose chairman, Yuzhu Shi, is one of Yunfeng's passive co-founders - previously committed $50 million to limited partnerships managed by the PE firm that invested in Alibaba. The investment was announced in September 2011, the same month Yunfeng and several other investors paid $1.6 billion for a 5% stake in the company. Giant sold its interest to Tiger Global last month for $199 million.
In addition to Alibaba, notable investments from Fund I include: digital cinema equipment manufacturer GDC Technology, which shelved plans for a $75 million NASDAQ IPO last year; Gaopeng, a group-buying site affiliated with Groupon; and search engine Sougou.
There has also been one disclosed investment from Fund II. In January, Yunfeng and Alibaba agreed to buy a 54.3% stake in pharmaceutical data provider CITIC 21CN, a Hong Kong-listed subsidiary of CITIC Group, for $171 million.
In 2011, Yunfeng partnered with Alibaba to launch a RMB1 billion fund with the company's cloud computing division.
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