China’s Boyu targets $1.5b for second fund – report

Boyu has received informal commitments to its second fund that already exceed the initial target, according to Reuters. LPs previously told AVCJ that they expect the fundraising period to be short and vehicle to be overssubscribed.

Boyu was set up in 2010 by Mary Ma, formerly of Lenovo and TPG Capital, and Louis Cheng, former president of Ping An Insurance president Louis Cheung. Its debut fund closed at $1 billion two years ago.

The partners also include Alvin Jiang, grandson of former President Jiang Zemin, which has led to Boyu to be labelled a princeling fund - so called because of their ties to the families of government officials and the perceived clout these bring in terms of access to deals, special exemptions from regulators and shortcuts to exits.

Boyu's past investments include participating in the PE tranche of Alibaba Group's $7.6 billion Yahoo buyback alongside China Investment Corporation (CIC), CITIC Capital and CDB Capital. It has also committed HK$371 million ($47.8 million) to Hong Kong retailer Stelux Holdings through a bond issue and is said to have invested in Cinda Asset Management.

If Boyu is successful, it come in the face of a challenging fundraising environment, with US dollar-denominated China funds having received commitments of just $4.1 billion in 2012, down 76% year-on-year.

Princeling credentials, though helpful, are no guarantee of LP interest. There is another such fund in the market - Nepoch Capital, which was co-founded by the son of He Guoqiang, who recently stepped down from China's politburo standing committee.

Nepoch started making the rounds last autumn and is said to have raised $200 million so far, with a target of up to $500 million expected to be reached by the middle of the year.

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• Topics
• Greater China
• Fundraising
• China
• Boyu Capital
• Fundraising