Shanghai Pharma establishes $469m healthcare fund
Chinese drug maker Shanghai Pharmaceuticals Group has partnered with Shanghai Real Power Capital to launch a healthcare-focused fund with a target of RMB3 billion ($469 million).
The fund - Shanghai Healthcare Industry Investment Fund - has an initial target fund size of RMB1 billion. Listed in Shanghai and Hong Kong, Shanghai Pharma will commit RMB250 million in the fund, while Real Power will contribute the same amount.
Real Power Capital is an investment unit established by the Shanghai International Group (SIG). Other units in the same group include Sailing Capital and GP Capital. According to a filing, Shanghai Industrial Investment (SIIC) and Shanghai Shangshi, two controlling shareholders of Shanghai Pharma, hold a 32.91% stake in Real Power.
As part of the deal, Real Power and other strategic investors will jointly invest RMB50 million in the establishment of a new investment entity - Real Health Capital - to raise the remaining capital from the third-party investors as well as to make investments.
The fund will invest in the healthcare ecosystem including medical e-commerce, R&D for new drugs, as well as medical equipment. Shanghai Pharma said it wants to tap into early-stage drug development space through establishment of a PE fund.
In March, Shanghai Pharma launched its drug e-commerce platform - Shanghai Pharmaceuticals Greater Health Online Company - with RMB100 million in registered capital. The platform sells prescription drugs and provides patients with multiple levels of healthcare services, such as patient education and chronic disease management.
Last week, the online drug distribution platform raised $174 million in a Series A funding. Chinese online retailer JD.com IDG Capital Partners took part in the round.
On the back of government reforms and a rising consumer class, China's healthcare sector is expected to see huge growth. At least five healthcare specialists have raised sector-focused PE funds in the last two years. They include Sino-US plays Vivo Capital and OrbiMed Advisors, China life-science focused BVCF and first-time fund HightLight Capital. Ally Bridge is raising a second fund, while newly-formed Aequus Asia Capital Partners is also seeking capital.
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