China-focused investment firm Capital Today is planning to wind down its long-running evergreen fund structure and return to raising traditional closed-ended funds, according to an AVCJ report.
The firm has begun preliminary discussions with limited partners (LPs) around a potential $500-million closed-ended fund.
As part of this transition, Capital Today’s evergreen fund launched in 2014, which has been in place for over a decade, would be wound down, subject to LP approval. The evergreen structure was originally adopted following strong performance from early China technology investments, notably JD.com, which Capital Today backed from 2007 through its IPO in 2014.
One early fund reportedly achieved a partially realised return exceeding 100x, reinforcing the firm’s long-term investment approach at the time.
Capital Today’s evergreen fund was structured as a 28-year vehicle divided into seven four-year periods, requiring LPs to periodically recommit capital, exit, or enter run-off. While this model offered flexibility, some LPs reportedly found it unsuitable.
Regulatory filings show that although the evergreen fund initially targeted $400 million, cumulative offering amounts increased over time, reaching $1.1 billion by 2022.
The news report said Capital Today’s move back to closed-ended funds reflected both LP preferences and evolving market dynamics, with evergreen funds remaining relatively uncommon outside a small group of US-based venture firms.
Founded in 2005 as one of the first independent private equity shops in China, Capital Today manages assets worth $3 billion, according to its website. The firm is focused on mid-cap investments in the consumer, retail, and Internet sectors.
Its portfolio companies include Ganji.com, Dianping.com, online snack brand Three Squirrels, Yifeng Pharmacy, and BiFeng Tang quick service restaurant, among others.
