San Francisco pension fund backs China's SBCVC - update
San Francisco City & County Employees’ Retirement System has committed $25 million to SBCVC’s sixth China fund, which has a target of $500 million. The GP closed its previous VC vehicle at $459 million in 2016.
The SBCVC investment was one of three made – through San Francisco Employees Retirement System (SFERS) – to Asian funds. The others included A$45 million ($34 million) for Australia and New Zealand-focused BGH Capital. BGH, which was co-founded by former TPG Capital Asia head Ben Gray recently closed its debut vehicle at the hard cap of A$2.6 billion.
SBCVC – otherwise known as SoftBank China Venture Capital – has enjoyed a close affiliation with SoftBank Corporation despite being an independent fund manager since its inception in 2000. US investors such as endowments and pension funds accounted for most of the Fund V corpus. SFERS and the International Financial Corporation (IFC) each contributed $25 million.
The venture capital firm, which also manages renminbi-denominated funds, targets the technology, media and telecom (TMT), clean technology, healthcare, consumer, and advanced manufacturing sectors.
Recent deals have focused on healthcare and artificial intelligence (AI). SBCVC participated in a Series D round for Taimei Medical Technology, a cloud-based software provider that serves pharmaceutical companies, and re-upped in drug developer HaploX Biotechnology. It also backed 12 Sigma, which applies AI to medical imaging diagnoses, and Malong Technologies, a specialist in AI and computer vision technology.
SFERS had total assets of $22.4 billion as of June 2017, of which $3.4 billion – or 15% – was allocated to private equity. The pension system had 13% in real assets and 3% in hedge funds. The one-year, five-year and 10-year returns on the private equity portfolio were 12.78%, 14.4%, and 10.83%, respectively.
According to AVCJ Research, in the last four years, SFERS has made LP commitments to Asia-focused managers including MBK Partners, PAG Asia Capital, Hahn & Company, Asia Alternatives, SSG Capital, FountainVest Partners, Hillhouse Capital, Baring Private Equity Asia, Kerogen Capital, Lilly Asia Ventures, and DCM China.
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