Hosen closes $440m China food and agri fund
China-focused food and agriculture specialist Hosen Capital has closed its third private equity fund at $440 million after eight months in the market. The target was $400 million.
The vehicle received a $30 million commitment last year from the International Finance Corporation (IFC), the investment arm of the World Bank. Additional LP support came from institutional investors across Asia, the US, Europe and the Middle East.
"With the closing of Fund III, we are very well positioned and appropriately resourced to continue to capitalize on fundamental mid-market opportunities in the global food and agribusiness value chain that are helping to drive consumption and growth in China, where today food represents almost a quarter of household expenditures,” Alex Zhang, co-founder and managing partner at Hosen said in a statement.
Fund III will make growth and buyout investments in companies that support Chinese consumption and are either in China or directly supplying consumers in China. Agricultural and food-related targeting will be supplemented by a secondary focus on adjacent consumer sectors.
Hosen’s second fund closed in 2013 at $128 million, falling short of a $200 million target. LPs included the IFC, Temasek Holdings and Mitsui & Co. Its debut fund raised RMB1 billion ($145 million) in 2010, with capital coming primarily from GP sponsor New Hope Group.
New Hope, which is said to be the largest agricultural conglomerate in China, set up Hosen in 2010 alongside IFC, Temasek and Mitsui. The GP is headquartered in Beijing and maintains offices in Chengdu, Shanghai and Guangzhou. It claims $2.3 billion in assets under management.
Previous investments include a focus on leveraging an increase in Chinese demand for imported beef. The firm acquired Australian beef processor and exporter Kilcoy Pastoral in 2013 and US beef processor Ruprecht in 2015. Supply chain support on the domestic end includes an investment in WeiDao, a beef distributor to Yum Brands and a number of Chinese food companies.
Eaton Partners served as placement agent for Fund III.
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