China Renaissance raises $446m for renminbi fund
Huaxing Growth Capital, the private equity division of China Renaissance, has achieved a CNY 3bn (USD 446m) first close on its fourth flagship renminbi-denominated fund.
LPs include government guidance funds, fund-of-funds, financial institutions, family offices, companies, and entrepreneurs.
This is the second fundraising China Renaissance has announced this year. The firm reached a USD 800m second close on its fourth flagship US dollar-denominated fund in February. That fund was launched in June 2021 with a target of USD 1.2bn and a first close of USD 550m came in October.
Huaxing has four renminbi-denominated funds and four US dollar-denominated funds not including three vehicles raised under a separate healthcare-focused private equity strategy.
The firm closed the third renminbi-denominated fund at around CNY 6.5 billion in 2019. It raised CNY 5.4bn for its second local currency vehicle in 2015 after the first vehicle closed at CNY 1bn in the same year.
On the US dollar side, Fund III closed on USD 600m in 2020, up from USD 179m in Fund II and USD 62m in Fund I.
China Renaissance had RMB61.7 billion ($9.5 billion) in assets under management (AUM) across six flagship funds at the end of June 2021. Across the six funds, the average IRR and gross multiple were 54% and 4.3x.
Advanced industrials, hard technology, and healthcare are expected to be prominent themes in the fourth renminbi vehicle, alongside consumer and enterprise solutions. This is the same strategy as in the US dollar strategy.
China Renaissance looks to invest in line with key policy initiatives: high-quality, sustainable, and increasingly technology-driven economic growth; and enlarging the 400m-strong middle class through access to new brands and services.
The firm is especially interested in "smartisation” – a term for using technological innovations in the traditional economy – and the mobility value chain. The latter involves electric vehicles (EVs), autonomous driving, and the long tail of the components suppliers that serve them, from semiconductors to batteries.
"With the accelerated pace of a new round of technological and industrial revolution, the traditional economy is ushering in the full penetration of digitisation," said Fan Bao, chairman and CEO of China Renaissance.
"We have reason to believe that the wave of smartisation is sweeping and will create new innovation opportunities for the next decade, namely the wide application of intelligent technology in various fields of economy."
Founded in 2005, China Renaissance made its name as an early advisor to Chinese technology unicorns. It then expanded into private equity, launching Huaxing in 2013.
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