Brookfield backs Sequoia China's new economy infra fund
Sequoia Capital China has raised a new economy infrastructure fund – which will invest in the likes of logistics, data centres, and life science parks – with Brookfield serving as the largest LP.
The size of the fund was not disclosed. The venture capital firm finished raising its most recent set of technology, media, and telecom (TMT) vehicles in 2020, collecting USD 180m, USD 700m, and USD 2.8bn, respectively, for seed, venture, and growth funds. This compares to USD 2.5bn across the three strategies in the previous cycle.
Brookfield said the partnership would combine its expertise in the financing and operation of infrastructure and other real assets with Sequoia’s new economy experience. Of the global alternative asset manager’s USD 650bn in assets under management, about USD 8bn is in China, primarily in real estate and renewable power. A China private equity head was hired last year.
“Sequoia China Infrastructure Fund will become another partner of choice for Chinese entrepreneurs in supporting companies’ visions with the backdrop of an exciting growth story of China’s new economy,” said Neil Shen, founding and managing partner of Sequoia China, in a statement.
New economy infrastructure, as defined by Brookfield and Sequoia, covers a broad range of areas: modern logistics, cold chain logistics, data centres, new economy business parks, modern manufacturing workshops, life science parks, and new energy infrastructure.
“New infrastructure” entered the China investment lexicon in 2020 when the Chinese government embraced it as a policy and part of a package of initiatives intended to offset the economic impact of COVID-19 and promote sustainable growth. It encompasses seven key areas, among them 5G networks, data centres, industrial internet applications, and electric vehicle (EV) charging stations.
It has since filtered into numerous fund-level mandates, typically as a catch-all for exposure to hard technology and associated software that Beijing expects to define the next generation of economic growth. New infrastructure is referenced by CDH Investments in the context of mezzanine, by Glory Ventures for deep technology, and by the phalanx of GPs pursuing sustainability strategies.
Last year, Sequoia announced the formation of a CNY 10bn (USD 1.52bn) carbon neutrality fund in partnership with clean energy specialist Envision Grou. It later joined a funding round for Envision, which promotes wind and solar as “new coal,” batteries and hydrogen fuel as “new oil,” and its artificial-intelligence-of-things networks that coordinate the hardware as the “new grid.”
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