Shiyu Capital closes second renminbi fund at $477m

LPs in Danqing Innovation Medical Investment Fund II fund-of-funds, government guidance funds, insurance companies, listed domestic and overseas pharmaceutical companies, and high net worth individuals, according to a statement.

The fund launched in May 2018 with initial commitments of RMB2.2 billion from the likes of China Development Bank Capital and the Suzhou Innovation Industry Development Guidance Fund. It will primarily pursue controlling interests in healthcare businesses.

Shiyu was founded in 2015 by Hongbing Yang, previously a director at Shenzhen-listed pharmaceutical company Harbin Gloria, and Jian Cao, formerly an auditor at KPMG. The firm closed its first renminbi fund at RMB1.1 billion in 2016.

Past investments include contract pharmaceutical R&D services provider Wuxi AppTec and drug developer CStone Pharmaceuticals. Wuxi AppTec went on to list in Hong Kong and Shanghai, while CStone now trades in Hong Kong. Shiyu has also backed Qingdao Double Whale Pharmaceutical, Lepu Medical, Hitgen, and Ascentage Pharma Group International. The latter filed for a Hong Kong listing last year.

PE investment in China's healthcare space has risen substantially in recent years. As much as $9 billion was deployed in 2018, up from $4.7 billion in 2017 and $3.7 billion in 2016, according to AVCJ research. A large portion of that capital has flowed into biotech start-ups, which accounted for $5 billion of the 2018 total. Several of them have already taken advantage of Hong Kong's move to allow listings by zero revenue biotech players.

However, most of these companies are now trading below their IPO prices. Weak investor sentiment is said to be tied to uncertainty over when products that are currently in clinical trials will enter the monetization phase.

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• Topics
• Greater China
• Renminbi fund
• Fundraising
• GPs
• Healthcare
• China
• healthcare
• Fundraising