Coller closes first deal for debut renminbi fund
Coller Capital has completed the first deal from its debut renminbi-denominated secondaries fund, participating in a CNY 315m (USD 46m) GP-led transaction involving healthcare assets held by Chinese VC firm Legend Capital.
This is the third time Coller has provided a secondaries solution to Legend. One of the earlier deals also focused on healthcare. In 2021, Legend spun out healthcare assets from two of its generalist US dollar venture capital funds into a new vehicle backed by Coller and Hamilton Lane. The USD 270m deal included capital for follow-on investments.
The latest transaction comprises six assets representing four sub-sectors: digital health, medical services, medical devices, and diagnostic technology. They come from Legend’s third renminbi fund, which closed on CNY 3.2bn (USD 440m) in 2014, according to a source close to the situation. It was remitted to target technology, media, and telecom, healthcare, consumer, and services assets.
Portfolio companies included contract research organization (CRO) Pharmaron, for which Legend co-led a USD 280m funding round in 2015 that helped the business transition from an offshore to an onshore structure ahead of a domestic IPO. Legend was among Pharmaron’s first institutional investors on the US dollar side in 2007. The company went public in 2019.
Legend started investing in healthcare through its fourth US dollar fund in 2007. With no dedicated healthcare team, the firm stuck to what it knew. Pharmacy chains were an early area of focus because Legend understood distribution. From there, it expanded into CRO – backing Pharmaron among others – medical technology, and biotech.
In 2015, Legend launched its first dedicated healthcare funds, raising USD 250m and CNY 1.6bn, respectively. There have since been two more local currency healthcare vehicles, the most recent closing on about CNY 3bn at the end of 2021. Legend is currently in the market with its third US dollar healthcare fund, seeking USD 300m. A first close of USD 177m came in 2021.
“We fully believe that through the sincere cooperation of both parties, we can achieve a win-win situation for both the new and existing investors of the selling fund, as well as the portfolio companies,” said Jafar Wang, co-CIO of Legend and head of the healthcare strategy, in a statement.
Wang added that Legend is a pioneer of GP-led secondaries in China, having completed several transactions since 2020. He noted that the local secondaries market is becoming increasingly active and now represents an important exit strategy for private equity managers.
Earlier month, Coller announced it had reached a first close of unspecified size on its inaugural renminbi secondaries fund. The overall target is CNY 1.5bn. The fund will provide liquidity solutions by acquiring LP positions in funds as well as participation in GP-led deals, direct secondaries, and structured transactions.
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