
GSR, Go Scale raise $1b for M&A fund, seek to deploy $5b – update
GSR Capital and its affiliate Go Scale Capital has raised $1 billion for a cross-border buyout and M&A fund, which it hopes will translate into $5 billion worth of dry powder once debt financing and co-investment are factored in.
The GSR Global M&A fund has received commitments from anchor investors including LPs of GSR GO Scale Capital and unnamed institutional investors.
"We have raised $1 billion and have sufficient commitments to do $5 billion worth of deals," Sonny Wu, co-founder of GSR Ventures and chairman of GSR Capital and Go Scale, told AVCJ. "We haven't decided which deals to do yet, but we're targeting transactions that could be worth $5-10 billion."
The GP, GSR Go Scale Capital Advisors, will work closely with Hong Kong-listed investment firm Good Resources, formerly known as Good Fellow Resources on management of all M&A deals from the fund. The two parties will co-invest in certain transactions. Good Fellow is controlled by Chinese billionaire Kin Ming Cheng, who has previously collaborated with GSR and Go Scale on other deals.
The fund will target international companies across clean energy, bio-pharmaceuticals and life sciences, bulk commodity investment, traditional and internet finance, wireless communication and the cultural industry. It will either buy companies outright or acquire minority stakes.
"We will create value for them by converging China and global resources, adopting cross-border and technical arbitrage and eventually realizing the capital gains through IPO or M&A," Wu said in a statement.
Prior to the launch of the Global M&A Fund, GSR Go Scale acquired an 80.1% interest in Lumileds, the LED components and automotive lighting unit of Dutch electronics giant Philips, at an enterprise valuation of $3.3 billion. Bank of China had agreed to facilitate $1.93 billion in debt to finance the deal.
In May, Go Scale led a transaction whereby a majority stake in its Chinese portfolio company, Lattice Power, was sold to Hong Kong-listed Shunfeng International Clean Energy (SFCE). Go Scale and its fellow investors in Lattice, which include GSR, Asia Pacific Resources Development (APRD), Crescent Point, Temasek Holdings and Mayfield, received HK$2.04 billion ($263 million) worth of shares in Hong Kong-listed SFCE. Cheng is a shareholder in both APRD and SFCE.
With offices in Hong Kong, Palo Alto and Beijing, GSR focuses on wireless internet, clean energy, semiconductors, and pharmaceutics and healthcare. The GSR family of funds, including early-stage venture funds, renminbi-denominated vehicles and the GSR GO Scale Capital growth fund, currently has over $2 billion under management.
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