Investcorp makes China debut, backs Everbright fund
Investcorp, a Bahrain-listed asset manager, has made its first foray into China by committing $150 million to China Everbright’s New Economy Fund. There is an additional co-investment right of up to $100 million.
The vehicle, which previously achieved a first close of $313 million, invests in areas such as e-commerce, internet services, smart retail, and artificial intelligence (AI). Portfolio companies include the world’s largest online-to-offline consumer services platform, market leaders in mobile e-commerce, long-form online video, short-form mobile video sharing, and a top deep-learning AI platform.
Investcorp, which was formed in 1982 and had $22.6 billion in assets under management as of June, said the technology sector was chosen for the firm’s first China private equity investment in recognition of the country “having the world’s highest number of internet users and being home to some of the fastest growing ‘unicorn’ technology companies.”
China was home to over 70 unicorns – private companies valued at $1 billion or more – as of August, according to CBInsights. AVCJ Research’s records show private investment in technology has amounted to $136.9 billion since the start of 2015, more than five times the total for the preceding four years.
A lot of this capital has poured into late-stage funding rounds. Prior to 2014, there were about half a dozen growth rounds of $300 million or more for Chinese technology companies. In the last four years, there have been over 50, including 22 so far in 2018. Eight rounds announced this year were worth $1 billion or above, taking the total since 2015 to 21.
Notably, Ant Financial, a financial services affiliate of Alibaba, raised $14 billion in Series C funding in June at a valuation of $150 billion. Several unicorns have also gone public this year, with Xiaomi and Meituan-Dianping debuting in Hong Kong, while the likes of Nio and Pinduoduo have listed in New York. However, post-IPO performance – in admittedly challenging markets – has generally been weak.
China Everbright is a Hong Kong-listed financial conglomerate engaged in fund management and principal investment. As of June, it had established 55 funds with aggregate commitments of HK$138.9 billion ($17.7 billion).
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