Hosen targets $750m for fourth China fund

The firm closed its previous vehicle in March 2017 at $440 million, exceeding the $400 million target. The new vehicle – which launched two weeks ago, according to sources familiar with the situation – will follow a similar remit, pursuing growth and buyout investments in companies that are based in China or grounded in supplying consumers in China.

Hosen operates up and down the food industry supply chain. Its most recent investment is a joint venture with South Korea’s CJ Group that will develop the Tous Les Jours bakery business in China. Other portfolio companies include pet-focused e-commerce platform Leepet, farm management solutions provider Acsm, condiments producer Yihai International, B2B2C catering logistics player Etaoshi, and Yum Brands supplier Haidu.

The firm has also been involved in some notable cross-border transactions. In 2013, Hosen acquired Australia’s Kilcoy Pastoral to leverage rising Chinese demand for imported beef. It then bolted-on US-based processor Ruprecht as a technology upgrade. Four years later, rising pet ownership in China was one of the motivating factors behind the firm’s participation in a consortium – alongside New Hope Group and Temasek Holdings – that bought Australia-based Real Pet Food.

Hosen has approximately RMB6 billion under management across US dollar-denominated and renminbi funds. Its LP base comprises Chinese conglomerates New Hope, JD Group, Haida Group and global strategic investors such as Temasek, ADM and Mitsui & Co, as well as fund-of-funds, pension funds, and the International Finance Corporation (IFC).

New Hope was the anchor investor in the firm’s debut renminbi fund of RMB1 billion in 2010. Hosen closed a US dollar fund two years later with commitments of $128 million, falling short of its $180 million target. By contrast, Fund III was oversubscribed within eight months. While New Hope accounted for the bulk of the Fund I corpus and received half the carried interest, Hosen has become more independent with each fundraise.

Agriculture – especially where it touches on the willingness of China’s emerging middle class to pay a premium for products that offer quality and reliability – is a longstanding private equity investment theme in Asia.

Food technology has risen to prominence more recently, with a focus on alternative meat producers and sustainable farming solutions. Singapore-based VC firm VisVires New Protein is one of several GPs specializing in this area. The firm is targeting $150 million for its second fund.

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• Topics
• Greater China
• Fundraising
• Growth
• Consumer
• GPs
• China
• Hosen Capital
• Agriculture