China Renaissance hits first close on flagship US dollar fund
Huaxing Growth Capital, a new economy-focused private equity division of China Renaissance, has reached the first close on its fourth US dollar-denominated fund of $550 million.
The first close came within four months of launch, according to a statement. The vehicle has an overall target of $1.2 billion.
New LPs account for about one-third of the first closing, among them sovereign wealth funds, international banks, and family offices. The entire investor base - which includes re-ups - features representatives from Europe, Singapore, Japan, China mainland and Hong Kong, and the US.
Advanced industrials, hard technology, and healthcare are expected to be prominent in Fund IV. China Renaissance is especially interested in the mobility value chain, investing not only in electric vehicle (EV) and autonomous driving companies but also in the long tail of the components suppliers that serve them, from semiconductors to batteries.
The broad theme is "smartization” or technological innovations within the traditional economy. This is in line with China's major policy initiatives: high-quality, sustainable, and increasingly technology-driven economic growth; and enlarging the 400 million-strong middle class through access to new brands and services.
China Renaissance's third US dollar fund closed last year at $600 million, a significant step up from its predecessors, which closed at $63 million and $183 million, respectively. There are three renminbi-denominated funds under Huaxing Growth Capital, while three more funds have been raised under a separate healthcare-focused private equity strategy.
China Renaissance had RMB61.7 billion ($9.5 billion) in assets under management (AUM) at the end of June. Across all its funds, the average IRR and gross multiple were 54% and 4.3x.
Founded in 2005, the firm made its name as an early advisor to China's technology unicorns. It then expanded into private equity and launched Huaxing Growth Capital in 2013.
Over the past eight years, Huaxing Growth Capital has invested in the likes of internet platforms Meituan, Kuaishou and Dewu, emerging consumer brands Pop Mart, Babycare and Dreame, EV value chain members Li Auto and HiRain Technologies, and healthcare specialists WuXi AppTech, MGI, and Fapon Biotech.
"We are committed to identifying the most innovative Chinese enterprises and founders for the future and partnering with them. We strive to create value for them and thus share in their value creation," said Fan Bao, chairman and CEO of China Renaissance.
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