China's Firstred closes debut renminbi fund on $1b

LPs include insurance companies, fund-of-funds, listed companies, and the founders and management of leading domestic businesses, participating directly or through family offices.

Firstred also announced plans to launch a renminbi-denominated growth fund and a US dollar vehicle. The firm recently recruited Brian Chi, who previously made China investments for The Blackstone Group and Morgan Stanley Private Equity Asia (MSPEA), as a managing director. Chi moved over from Loyal Valley Capital, where he spent less than one year.

Firstred was established in 2019 by Xiaodan Liu, formerly CEO and chairwoman of Huatai United Securities. Liu has more than 20 years of experience in investment banking in China. She was instrumental in Huatai’s international market expansion and acquisitions, personally leading the implementation of several capital market strategies in China and overseas.

Renminbi funds received commitments of $27.9 billion in 2020, down from $49.6 billion the previous year, according to AVCJ Research. The number of final closes fell from 333 to 59. Having peaked at $99.5 billion in 2016, local currency fundraising hasn’t recovered from restrictions on how financial institutions could participate in the asset class.

Government guidance funds remain the major players in the market, accounting for the bulk of capital raised – most of it from governance agencies and state-owned enterprises. Firstred’s fund is the largest first-time renminbi vehicle in three years raised by a manager without government or corporate affiliations, AVCJ Research’s records show.

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• Topics
• Fundraising
• Renminbi fund
• Greater China
• China
• Firstred Capital