China Renaissance closes third US dollar fund at $600m
China Renaissance has closed the third US dollar-denominated fund under its flagship Huaxing Growth Capital private equity platform at $600 million.
LPs include sovereign wealth funds, commercial banks, fund-of-funds and family offices across Europe, Asia and the Middle East, according to a statement.
The vehicle completed the first close in August 2018 and had total committed capital of $564.4 million as of December 2019. Of this, $85.7 million had been deployed. The firm closed its third renminbi-denominated fund under the same arm with more than RMB6.5 billion ($950 million) in commitments last year. The predecessor local currency vehicle closed at RMB5.4 billion in 2015.
China Renaissance's private equity funds now have approximately RMB40 billion in assets under management. It manages nine funds under Huaxing Growth Capital - three dedicated healthcare funds as well as the generalist US dollar and renminbi vehicles - and 17 project funds.
Investments from the latest US dollar fund will be up to $50 million in size. The strategy remains the same: focusing on new economy growth-stage companies that are benefit from technological innovation, consumption upgrades, and industrial transformation.
"In spite of the persisting global pandemic, China's economy – especially the new economy sectors – have outperformed the global market, demonstrating resilience and huge potential with exceptional growth,” said John Hsin, a managing partner of Huaxing Growth Capital. "China has become the world's largest single market of Internet-related industries where innovative companies are increasingly favored by global investors."
Investments this year - across different platforms - include HR software-as-a-service (SaaS) player eRoad Software, fresh produce retailer Xingsheng Youxuan, gene sequencing device manufacturer MGI Tech, automotive electronic products supplier HiRain Technologies and insurance technology specialist Insgeek.
There have also been IPOs for the likes of electric vehicle manufacturer Li Auto, property listings platform Beike Zhaofang and last-mile delivery player Dada Group.
China Renaissance is best known for providing private placement and M&A advisory services to Chinese internet companies, but it has broadened in scope to offer brokerage, wealth management and investment management services.
Private equity investment or investment management has seen the best growth across all segments. Last year also marked the first time the firm had generated carried interest since entering the private equity space in 2013. It realized RMB42 million, with the more mature funds posting an average multiple of 2.1x.
As of June, China Renaissance's private equity funds had an average multiple of 2.5x and an IRR of 33%. The first two US dollar funds under Huaxing Growth Capital closed at $63 million and $183 million, respectively. As of December 2019, they had generated gross multiples of 3.5x and 1.6x.
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