Sinopharm Capital to launch $157m RMB fund
Sinopharm Capital, a subsidiary of drug distributing conglomerate Sinopharm, has launched an RMB1 billion ($157 million) fund that will invest in different segments of the healthcare industry.
The initial LPs in the Shanghai Sinopharm Private Equity Fund include Sinopharm itself - also known as China National Pharmaceutical Group Corporation - and Fosun Pharmaceutical, the listed biotech arm of China's largest privately-owned investment firm.
Sinopharm, which holds an equity interest of more than 30% in the GP, intends to invest RMB50 million in the new vehicle, and Fosun Pharma will match this amount. Other investors are expected to provide a further RMB845 million of capital.
The GP contribution has been established at RMB5 million and the lifespan of the fund is 5+2 years. Sinopharm Capital will command a 2% management fee and 20% as carried interest. Distributions will be made within three months from the exit of each investment or when cash flow becomes available from each project.
Shanghai Sinopharm will seek to participate in businesses in the medical and healthcare industries, particularly high-growth companies involved in medical or pharmaceutical manufacturing and distribution, medical equipment, pharmaceutical research and development, and medical and pharmaceutical services.
This news comes just a day after the Financial Times reported that Fosun International, Fosun Pharma's parent, is planning to raise as much as $1 billion for its previously announced US-dollar denominated fund, which aims to boost its investment activity overseas.
The Shanghai-based group has approached Middle Eastern sovereign wealth funds in Dubai, Abu Dhabi and Doha to co-invest with Fosun on deals targeting the consumer, financial services, green energy and healthcare sectors. Fosun's CEO, Liang Xinjun, said the firm is only comfortable to invest $50-200 million in each project and thus needs sovereign wealth funds, pension funds and endowment funds to help it achieve the necessary scale.
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