Morningside closes debut renminbi VC fund at $143m

The LP base comprises large domestic financial institutions, fund-of-funds, family offices and internet entrepreneurs, according to a statement.

They include: Gopher Asset Management, CICC Qiyuan National New Industry Venture Capital Guidance Fund, Suzhou Guochuang Kaiyuan Fund, Huatai Merchants Capital Market Investment FoF, China Merchants Venture, Shengjing FoF, and CreditEase Wealth Management, as well as individual backers from Tencent Holdings and smart phone maker Xiaomi.

Much like Morningside's US dollar funds, the renminbi vehicle will focus on early-stage investments in the technology, media and telecom (TMT) space, including artificial intelligence, enterprise software, financial services, healthcare, sports, social networking, hardware, education and transportation sectors.

“It took us a long time to decide whether to raise a renminbi fund. When we found that there were more sophisticated domestic LPs who have a longer view towards the asset class, we decided to move ahead. There were some challenges during the fundraising process, but we believe a renminbi fund will bring us a lot of opportunities,” said Ken Shi, a partner and managing director at Morningside.

Morningside was set up by Hong Kong’s Chan family, owner of property developer Hang Lung Group. The VC firm spun out from its parent in 2007-2008 and launched independent funds, although the Chan family remains an anchor LP.

The first US dollar fund closed at $150 million in 2008 and the second closed at $225 million three years later. Morningside raised $412 million for its third fund - comprising a core fund and two side vehicles - in early 2014. One year later, Fund IV closed at $660 million, once again with three tranches covering early to late-stage deals.

LPs in the US dollar funds include endowments, foundations, pension funds, sovereign wealth funds, family offices in Europe and the US.

With more capital available from an increasingly sophisticated set of domestic LPs, a number of foreign PE and VC firms, such as GGV Capital, are looking to raise renminbi vehicles or enlarge existing pools of local currency capital. However, a dual currency approach also presents conflicts of interest that GPs must address.

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• Topics
• Greater China
• Fundraising
• Renminbi fund
• Early-stage
• Technology
• China
• Venture
• TMT
• Morningside Technologies
• LPs