DCP closes debut China fund at $2.5b

The US dollar vehicle was significantly oversubscribed, DCP said in a statement, with strong demand from the likes of sovereign wealth funds, pension funds, fund-of-funds, endowments and family offices. New York State Common Retirement Fund is among the LPs, having made a $25 million allocation through Asia Alternatives. It is joined by the likes of GIC Private, Temasek Holdings, and Caisse de depot et placement du Quebec (CDPQ), according to a source familiar with the situation.

DCP has already deployed about 30% of its corpus across half a dozen deals, both buyouts and minority investments. They include the acquisition of circuit board manufacturer MFS Technology, a $70 million commitment to energy industry supplier Sunpower alongside CDH Investments, and an investment of undisclosed size in medical devices manufacturer Venus Medtech.

The firm has also backed two companies that Liu and Wolhardt invested in while at KKR. It holds a 7.98% interest in Far East Horizon, a financial leasing company that received funding from KKR in 2009. Then there is a 6.85% stake in meat processor COFCO Meat, which took an investment from KKR in 2014. The latter was one of a string of deals intended to leverage consumer demand for food that meets high quality and safety standards. 

The DCP team, which comprises approximately 20 investment professionals, targets sectors that benefit from domestic consumption upgrades and industry consolidation in Greater China. Consumer, industrial technology, healthcare, food and agriculture, business services, financial services, and technology, media and telecom (TMT) are all on the agenda.

“The Greater China region offers significant investment opportunities as the economy continues to develop through consumption upgrades and industry consolidation. We will continue to apply the disciplined, value-oriented investment approach that we have always practiced to generate attractive returns across multiple economic cycles. We believe this approach, coupled with our strong focus on driving operational improvements in our investee companies, is especially important in today’s investment environment in Greater China,” Wolhardt said.

Liu and Wolhardt have been investing in China since the mid-1990s and joined KKR in 2006 from Morgan Stanley Private Equity Asia. They were responsible for deploying capital from KKR’s pan-regional funds as well as a China mid-market fund. Liu was most recently co-head of Asia private equity and head of China at KKR, while Wolhardt was regional leader of China. They left the firm at the end of 2016.

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• Topics
• Greater China
• Fundraising
• Buyouts
• Growth
• GPs
• Renminbi fund
• DCP Capital Partners
• China