China Renaissance collects $943m for renminbi fund

Investor demand amounted to RMB7.5 billion, the firm said in a statement. The vehicle reached a first close of RMB4 billion in late 2017. At the time, a final close of up to RMB6 billion was expected in early 2018, but the local currency fundraising environment soon became more challenging after restrictions were imposed on financial institutions participating in private equity.

LPs in the third iteration of the Huaxing New Economy Fund include the National Council for Social Security Fund (NSSF) – which came in as a new investor – as well as banks, insurance companies, fund-of-funds, and endowments. This marks a departure from China Renaissance, which has traditionally relied on high net worth individuals for much of its capital.

The fund will focus on technology and business services, consumer-oriented internet companies, new energy, and advanced manufacturing. The general remit for the Huaxing Growth Capital team is to back revenue-generating businesses with products and services for which there is established market demand and the potential to achieve a valuation in excess of $1 billion.

Total assets under Huaxing Growth Capital now stand at $4.1 billion across three renminbi funds and three US dollar funds. Investments have been made in more than 90 new economy companies, of which 85% have gone on to complete follow-on funding rounds. Meituan Dianping, WuXi AppTec, Focus Media, and Lexin Fintech are among the past investments.

The firm raised RMB5.4 billion for its second local currency vehicle in 2015. It includes some of the GP's largest investment positions, including online real estate platform Lianjia, online steel-trading platform Zhaogang, and JD Finance, an internet-based financial services business that was spun off by JD.com.

Fan Bao, founder of China Renaissance, said that over the past six years, Huaxing Growth Capital has sought to establish itself as a value creator as opposed to merely a "value discoverer." He added that clarity of strategy and strength of team have enabled the firm to beat its fundraising target despite difficulties in the renminbi fund space.

China Renaissance – best-known for providing private placement and M&A advisory services to Chinese internet companies – started making proprietary investments in the technology space and used that as the basis for an independent asset management business. It also provides securities underwriting, research, sales and trading, and other financial services. The company announced an aggressive push into wealth management services upon listing in Hong Kong towards the end of last year.

The goal is to achieve $10 billion in assets under management within private equity by 2020, as well as raise more capital from foreign LPs. Last year, China Renaissance added dedicated healthcare and mezzanine debt strategies to its core growth equity offering.

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• Topics
• Greater China
• Fundraising
• Growth
• Technology
• Renminbi fund
• China
• TMT
• China Renaissance