GPs are placing greater emphasis on Asia private debt strategies to capture deals that don’t work as private equity. Much can be achieved by pooling ideas and resources, but collaboration isn’t always straightforward.
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Goodbye CITIC Capital Partners, hello Trustar Capital. The naming of a private equity firm is an intriguing process, especially when it must work in two languages. The rebranding of CITIC Capital Partners represents a distancing from the ultimate parent – China’s CITIC Group – but a retention of its values and an assertion of the management team’s identity.
The new English name is a compound of “trust” and “star,” while the Chinese version, “Xinchen Ziben,” is a rough translation with a twist. Trust, or "xin," is a reference to CITIC Group’s original name as well as an obvious statement of intent to investors and investees. “Chen” is an allusion to Yichen Zhang, the firm’s CEO, whose given name can be interpreted as “north star” or “polestar.” The polestar is regarded as a symbol of passion and commitment.
Branding consultants and fengshui masters are routinely engaged to help GPs identify names that resonate professionally and personally. There are practical considerations as well. For example, a disconnect between the Chinese and English versions might mean little to a VC that prioritizes relationships with Chinese entrepreneurs – until it wants recognition in a US IPO prospectus or foreign LPs draw a blank when doing reference checks in the local market.
In 2014, for a story, AVCJ asked two fengshui masters to rank the Chinese names of few GPs. CDH Investments (鼎晖), Boyu Capital (博裕), and Qiming Venture Partners (啓明) came top.
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China’s autonomous driving start-ups are flexing their fundraising muscles. Momenta’s recent $500 million Series C comes within weeks of Pony.ai, WeRide, and Didi Autonomous Driving closing rounds. It might be coincidental, but similar tit-for-tat has emerged in other segments when well-funded start-ups look to win the marketing battle as well as the technology battle. Think – to varying degrees – ride-hailing, food delivery, bike-sharing, grocery delivery.
Autonomous driving differs from the rest in that there is no underlying Alibaba Group vs Tencent Holdings narrative. The bulk of the strategic money comes from the automotive industry, with the likes of SAIC Motor, Toyota, Nio, Yutong Group, FAW Group, and Alliance Ventures (representing Nissan Motor, Mitsubishi Motors, and Renault) all participating.
Aligning with a disrupter is how these companies keep tabs on industry disruption. Parallels can be drawn with automotive makers piling into Grab and Gojek in Southeast Asia.
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Only six China VC firms have raised $1 billion or more in a single vintage (excluding renminbi funds): Sequoia Capital China, GGV Capital, Shunwei Capital, 5Y Capital, Qiming Venture Partners, and Gaorong Capital. Source Code Capital looks set to become the seventh, having made filings for venture and growth funds of $420 million and $580 million, respectively. LP sources confirmed the imminent final close. It caps a vertiginous rise for Source Code, which was founded as recently as 2014. The firm closed its previous fund at $570 million in 2019..
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 India’s non-bank financiers remain attractive investment targets as a convergence of macro and systemic shocks tests the market. Sturdy underlying drivers provide confidence as models evolve.
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 Ontario Municipal Employees Retirement System (OMERS) recently backed a spinout of Olympus Capital Asia’s credit team as Orion Capital Asia. Ani Deshmukh, a director with the Canadian pension fund, explains its regional strategy.
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The merger of Ares Management and SSG Capital is among the largest ever seen in Asian alternatives. They are now pushing into new markets and segments, leveraging the combination of size and local resources.
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A combination of improved collateral, rising yields and robust demand is drawing investors to China’s direct lending space. Opportunities abound, but local execution remains critical.
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Asia Pacific overtook North America to become the most active global private equity healthcare market for the first time in 2020, according to Bain & Company. AVCJ Research’s data on broader PE and VC activity in the sector show $30.6 billion was deployed across 745 transactions, breaking the record of $18.5 billion and 591 deals set in 2019. Growth equity and VC investment both doubled, spurred by China’s biotech boom. Healthcare accounted for 14.5% of overall investment, cementing its position as the second most prolific sector in US dollar terms. The gap to IT in first place is wide, but narrowing. Between 2014 and 2019, commitments to IT were 4.5x those to healthcare. In 2020, it was 2.2x.
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All of the trends featured here were sourced from AVCJ's proprietary database, AVCJ Research, featuring comprehensive information on private equity deals, fundraises and exits.
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