International Finance Corporation (IFC), the private lending arm of the World Bank, is looking at investing up to $30-million into China-focussed private equity fund Principle Capital Fund IV L.P.
The move marks IFC’s third such equity commitment in China’s private equity space in less than two months.
The mid-market focussed Principle Capital Advisors Ltd is on the road to raise a $350-million fresh fund targeting investments in fast-growing enterprises located in cities around eastern seaboard of China, such as Shanghai. It is a 10-year, close-ended generalist PE fund.
IFC says, in its filing, its investment will play a catalytic role in attracting additional investors into the fund and allow it reach its target size.
The Shanghai-based fund has over $350 million assets under management across four collective investment vehicles.
Principle Capital, which was set up 2002, focusses on enterprises that have a potential to be business leaders. The firm invests through controlling ownership or strategic minority positions in portfolio companies.
As a strategic investor, Principle provides management support to portfolio companies, according to information from its website.
Some of its portfolio investments include Amicogen Biomedical China, iService Holding Group, Jiangsu Tie Mao Glass Co, independent third party B2B online travel platform lvyouquan, Shanghai Genchem, Zhejiang Hisoar Pharmaceutical, Lier Chemical, among others.
The World Bank arm has, in recent weeks, proposed an aggregate equity investment of $40 million into two China-focussed funds.
IFC is likely to make an equity investment of up to $25 million in a new fund, SBCVC Fund V, L.P., that is raising $400 million, targeting investments in high-tech, high growth companies in TMT, clean technology, healthcare, consumer/retail, and advanced manufacturing sectors.
It also announced its commitment of injecting $15 million in China-focussed fund, Sinovation Fund III LP, headed by technology sector veteran Dr Kai Fu Lee. Sinovation Fund III L.P, a venture capital fund targeting early stage TMT companies in China, has a target size of $250 million.