PE consortium targets $1.5b China outbound fund
A consortium of foreign and Chinese PE firms has launched a $1.5 billion fund, which aims to raise a combination of US dollars and Chinese currency to invest abroad.
The fund was set up in December by Chinese GPs Bohai Industrial Investment Fund Management and Harvest Fund Management, alongside US Rosemont Seneca Partners and Thornton Group, with an original target of $1 billion.
According to The Wall Street Journal, fundraising started in the second quarter with an increased target of $1.5 billion.
Domiciled in Shanghai's free trade zone - part of a pilot program to encourage internationalization of the renminbi and cross-border investments - the fund is expected to take advantage of simplified administration approvals to covert the renminbi portion into US dollars and then make investments overseas.
The fund will be managed by Bohai Harvest RST (Shanghai) Equity Investment Fund Management. It will focus on cross-border M&A opportunities within four sectors - high-end manufacturing, financials, consumer, and energy and resources.
Bohai Industrial Investment Fund was launched by Bank of China International Holdings (BOCI) in 2006, as a renminbi-denominated vehicle designated to invest in Bohai Rim Region.
Established in 1999, Harvest Fund Management is one of China's largest asset managers. In addition to private equity, it also manages mutual funds and real estate investment products.
Both Rosemont Seneca and Thorton Group are investment and financial advisory firms.
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