C Ventures rebrands, hits first close on new fund

The firm was founded in 2017, with its first fund acting essentially as a family office for Cheng. A second vehicle closed in 2019, attracting some third-party capital. Fund III has a target of USD 300m and has raised about half that amount in its first close, according to a source close to the situation.

The LP base is largely comprised of families across Asia and the US, although there are also corporations and insurance companies in the mix. There are about 20 institutional investors in all. Ben Cheng, co-founder, president and CEO of the firm, declined to comment on fund details but confirmed that total funds under management are now around USD 1bn, including a new private credit fund and crypto hedge fund.

Fund III will make later-stage commitments than its predecessors, targeting 10% positions in pre-IPO companies. C Capital ramped up its activity in this vein last year with Hong Kong tech accessories brand Casetify and Shanghai-based chip design company Biren. It made single-deal investments of USD 60m in the former and about USD 50m in the latter.

“This is a time to consolidate market share and that’s why it makes sense to stay away from seed-stage companies,” Ben Cheng (pictured) said. “I suspect the next 18 months will be quite difficult for entrepreneurs to raise subsequent rounds. We want to bet on the bigger guys with enough cash balance to operate for at least two years.”

C Capital has grown rapidly in five years, with three offices across China and one in the US. There are now three staff in private credit, two in the hedge fund business, and about 12 private equity investment professionals, in addition to around 10 back-office staff. Their average age is in the early 30s.

The ambition to develop a strategic consumer ecosystem into an institutionalised, multi-strategy GP was to some extent modelled on France’s L Capital, which emerged from luxury good conglomerate LVMH to merge with US brands manager Catterton and build a global footprint across strategies including real estate.

C Capital also wants to become a global leader in web3. Investments in this space include RTFKT Studios, a UK-headquartered non-fungible token (NFT) company best known for helping shoe giant Nike become one of the first major consumer companies to embrace NFT branding. RTFKT was acquired by Nike late last year and is said to generate annual revenues of USD 200m from NFT issuances.

There is interest in web3 concepts such as metaverse real estate as well, with New World Development among the biggest virtual landholders in Hong Kong’s Sandbox. “If 20 years down the line, people are spending all their time in the metaverse with goggles on, it will be important to be a first-mover and own land. It’s an extreme scenario, but if it happens, we’re there,” Ben Cheng said.

The risk appetite implied by C Capital’s youth, aggressive expansion efforts, and embrace of frontier technologies is tempered by its family office roots. The crypto hedge fund, for example, runs a relatively conservative long-short strategy by not adding leverage.

Moreover, there is a conservative approach to exits. Substantial positions are often sold early to secure returns even when much larger paydays appear likely down the track. The firm claims to have realised more than 20 exits in the past few years.

“It’s always in our mindset to return capital to investors as soon as there’s an opportunity,” Cheng added. “We are very focused on DPI [distribution to paid-in] and solid returns.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• GPs
• Fundraising
• Venture
• Growth
• Technology
• Consumer
• Hong Kong (China)
• C Ventures
• Cryptocurrency
• metaverse
• blockchain