Shanghai-listed property developer, Shanghai Chengtou Holding has committed RMB400 million ($62 million) to Hony Capital’s latest China fund.
Shanghai Chengtou is also a portfolio company of Hony Capital, which is the second largest shareholder in the LP. It had acquired a 10 per cent stake in the listed company for RMB1.8 billion in 2013.
The GP (Hony Capital) is also raising a $600 million co-investment side vehicle that allows LPs to participate in cross-border transactions outside of China. Prospective foreign portfolio companies are expected to have strong growth potential in China, Shanghai Chengtou added in a filing.
The fund will invest in mainland China, Hong Kong and Taiwan, where half of the corpus is expected to be deployed in state-owned enterprises (SOEs) that need to be reorganized in both private and public markets.
It will also invest in private companies that are undergoing restructuring or transformation, or are in distress.
Hony Capital Fund VIII has a target of $2 billion for the core corpus, but had reached a first close of $1 billion in late last year.