Trustar to launch China growth strategy

A target of $500 million has been set for the new vehicle, according to sources close to the situation. Trustar declined to comment on fundraising.

The firm closed its most recent fund – CITIC Capital China Partners IV – in 2019 at $2.8 billion. Key themes include corporate carve-outs and investments in foreign companies that have a China expansion angle. Most recently, it backed MedAlliance, a Swiss medical technology business.

Trustar has scaled up in size in recent vintages, moving from $925 million for Fund II to $1.57 billion for Fund III. This coincided with a merger of the firm’s China and China-oriented international strategies, which had previously managed separate funds. A renminbi-denominated vehicle of RMB3 billion ($439 million) was raised alongside the third US dollar fund.

Several private equity firms have launched China growth strategies to address mid-size investment opportunities that would otherwise fail to meet the minimum check size requirements of ever-larger flagship funds.

CDH Investments closed its first venture growth capital (VGC) fund at $800 million in 2017 and then raised $1 billion for a successor vehicle last year. Both comprise separate US dollar and renminbi pools of capital. They are intended to work alongside the China-focused manager’s main funds, which closed at $2.55 billion and $1.5 billion in the parallel vintages.

PAG Asia Capital also launched a China growth strategy in 2017, going on to raise a $350 million fund. The PE firm closed its most recent pan-regional vehicle at $6.1 billion in 2018. The main fund’s investment in Hisun BioRay Biopharmaceutical two years ago started out as a growth opportunity, but the seller was ultimately persuaded to give up control.

Trustar has $7.6 billion in committed capital and operates in China, Japan, and the US. Its parent, CITIC Capital Holdings, has more than $35 billion across private equity, real estate, structured investment and finance, special situations, and asset management strategies.

Ownership of Trustar is split 51-49 between CITIC Capital Holdings and the management team. The rebranding is partly intended to emphasize the independence of the PE firm.

The new name is a compound of “trust” and “star,” while the Chinese version, “Xinchen Ziben,” is a rough translation with a twist. Trust, or "xin," is a reference to CITIC Group’s original name, while “chen” is an allusion to Yichen Zhang, the firm’s CEO, whose given name can be interpreted as “north star” or “polestar.” The polestar is regarded as a symbol of passion and commitment.

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• Topics
• Greater China
• Fundraising
• GPs
• Growth
• China
• Trustar Capital
• CITIC Capital