New Horizon closes Fund III

Chinese media reports cited commitments from some 30 or more global investors. According to some reports, the final close of $750 million was the fund's hard cap, though New Horizon declined to confirm this. This follows reports as late as January this year of a $1 billion target. The announced target for the fund for most of 2009 was $600 million, as the fundraising environment worsened following its 2H08 launch.

The fund was actually launched 2009, and had an initial closing in November 2009 at $265 million, according to AVCJ Research figures. Temasek and SBI both reportedly returned to invest in this fund, with Morgan Creek Capital Management and Siguler Guff & Co. also participating as investors.

The close comes amidst industry talk of great interest from global LPs in proven PRC private equity platforms. New Horizon was co-founded by the Chinese Prime Minister's son, Winston Wen Yunsong, an MBA graduate of Kellogg School of Management at Northwestern University.

However, LPs are also raising concerns about the flight to quality trend. "It's this flight to the names," said one. In their view, LPs have increased their due diligence and platform assessment, but the ultimate decision of their investment board is still being dictated by familiarity and caution. "The thinking gets better – but writing the check, that's a different matter," the source said.

They also warned that closings like New Horizon's are unreliable guides to the overall temper of fundraising in the market. "If you gauge interest based on those few magnets for capital out there, you do have a pretty misleading picture," said one.

Further fundraising developments revealed to AVCJ confirm that many less well-known firms are abandoning their raising plans, resetting their targets, or resigning themselves to a long quiet period on the fundraising trail.

New Norizon has raised one RMB fund, its 2009 RMB1 billion ($146 million) New Horizon RMB Fund, as well as its 2005 $100 million New Horizon Fund and its 2006 $500 million New Horizon Capital funds. It cites investments across sectors including chemical, energy, multimedia, high-tech, consumer products, and auto components, with a target investment per deal of around $50 million, according to Chinese reports.

UBS was the placement agent on New Horizon Capital III. Simpson Thacher & Bartlett LLP acted as US counsel to the Fund and New Horizon, while Walkers served as Cayman counsel.

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• Topics
• Fundraising
• Funds
• Greater China
• Temasek Holdings
• New Horizon Investment Advisors
• SBI Holdings