Principle targets $350m for China fund

The International Finance Corporation (IFC) said in a disclosure that it is considering a $30 million commitment to Principle Capital Fund IV. It is described as a generalist fund that backs fast-growing mid-market companies in China.

Based in Shanghai, Principle was founded in 2002 by Lin-Lin Zhou, formerly of Fosun Capital and McKinsey & Company, and Zhong-Ren Jing, who previously worked at the American Institute of Research. The firm has made approximately 30 investments since inception - securing full or partial exits from about half of them - and claims to have delivered a gross IRR in excess of 40%.

Principle portfolio companies that went public in 2015 include Trendzone Construction Group and Shida Shenghua Chemical Group.

The existing portfolio demonstrates an interest in healthcare, environmental services and high-tech manufacturing. Speaking at the recent Hong Kong Venture Capital & Private Equity Association's (HKVCA) Asia forum, Zhou said that rising labor costs in China emphasize the importance of technology upgrades in the manufacturing sector.

"Young people don't want to work in factories any more, they want to work in the new economy," he said. "So you have to consider machines, robotics, as a supplement to human labor. Actually, we have found the cost of robotics has gone down quite significantly."

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• Topics
• Fundraising
• Greater China
• Expansion
• LPs
• China
• Growth capital
• Fundraising
• IFC
• LPs
• Principle Capital