China's DCL raises $578m for renminbi fund
DCL Investments, one of the first local private equity firms to focus on distressed assets in China, has raised CNY 4bn (USD 578m) for its latest renminbi-denominated fund.
LPs include a dozen insurers, several state-owned investment platforms, securities companies, trust companies, and endowments. The firm said in a statement that the re-up rate among existing investors was high. Insurers and state-owned platforms make up the bulk of new LPs.
DCL did not say when the fundraising began. However, the vehicle has already completed its first round of investments and realised several exits. It had raised CNY 3bn as of November 2020.
It targets special situations opportunities, typically involving companies that are experiencing liquidity crises or operational difficulties. Investments will predominantly be in first-tier cities and key industrial areas such as the Yangtze River Delta and Pearl River Delta regions. Sectors of interest include industrial property, marine logistics, and new energy-related infrastructure.
“Distressed asset investment will be in a good investment window in the coming few years. On one hand, the pandemic is gone, economic fundamentals are resilient, and market confidence is gradually recovering – which will provide strong support for core asset prices,” said Hualing Zheng, chairman of DCL.
“On the other hand, internal and external uncertainties still exist, and the upgrading and transformation of the economic growth model will be a long-term process. Distressed assets will continue to emerge. Leading institutions holding large volumes of capital are expected to acquire assets and consolidate the industry.”
DCL’s first two local currency vehicles closed in 2016 and 2017, respectively, each on CNY 3bn. A debut US-dollar fund launched in 2020 with a target of USD 500m. A final close of USD 25m came last year, according to a source close to the situation.
Since its inception in 2015, DCL has identified distress as a quickly emerging opportunity against a background of economic transition and industrial transformation. It divides its strategy into three parts, with non-performing loans (NPLs) forming the base, distressed real asset restructuring in the middle, and distressed corporate restructuring at the top.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.