CITIC Capital raises $1.57b for US dollar tranche of China fund
CITIC Capital Partners has closed the US dollar-denominated portion of its latest China fund at the hard cap of $1.57 billion after about one year in the market. The renminbi tranche is still being raised, with a target of RMB3 billion ($439 million).
The fund launched in April last year, initially seeking $1.2 billion for the US dollar pool, known as CITIC Capital China Partners III, and approximately $300 million for the renminbi pool. The target for the US dollar portion was increased in response to strong LP demand - it was oversubscribed - and it closed in April of this year. Once the renminbi tranche is finalized, total capital for deployment is expected to reach about $2 billion.
CITIC Capital previously pursued separate China and international strategies. Its previous China fund closed at $925 million in early 2010 and primarily pursues control deals across manufacturing, consumer, healthcare, and technology, media and telecom (TMT). The GP also raised $562 million for an international fund in 2011, which targeted US assets with underexploited China angles.
For the latest China fund, CITIC Capital brought the China and international teams together. This is in part a response to the broadening cross-border opportunity, which has evolved from focusing on industrial assets to include areas such as consumer goods and services, education, and healthcare.
The fund looks to deploy $100-200 million in equity per transaction, primarily seeking China buyouts. It has already committed to two deals (both of which are awaiting regulatory approval): the $2.1 billion acquisition alongside CITIC Group and The Carlyle Group of a controlling stake in the McDonald’s mainland China and Hong Kong businesses; and the $600 million purchase of the sexual health division of Australia-listed medical products supplier Ansell.
CITIC Capital Holdings - which is owned by the Hong Kong-listed entity of CITIC Group, Tencent Holdings, Fubon Life Insurance, and Qatar Holdings - has $20 billion in capital across private equity, real estate, mezzanine finance, asset management and venture capital. The PE arm operates in China, the US and Japan and manages $4.5 billion in committed capital. CITIC Capital's third Japan-focused fund closed at JPY30 billion ($268 million) in February.
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