Chinese distressed assets and special opportunities investment fund DCL Investments is targeting around $500 million for its first US dollar-denominated fund and 3 billion yuan ($446 million) for its third RMB fund, according to a report by AVCJ.
The report said, DCL Investments is aiming to reach the final close for its RMB vehicle in the first half of this year.
An email sent to DCL Investments did not elicit a response at the time of publishing.
In 2017, the fund manager was said to seek its first US dollar fund with a $300 million target. On its website, the firm says it manages three RMB funds and a USD fund with over 8 billion yuan of assets.
Its LP base includes insurance companies, university endowments and state-owned research funds, among others.
An affiliate of CDH Investments, one of China’s largest private equity firms which manages more than 100 billion yuan globally, DCL Investments focuses on distressed assets investments, especially non-performing loans. Geographically, its investing activities cover major metropolitan regions of China, including Jingjinji, Yangtze River Delta, and Pearl River Delta.
DCL Investments’ first two RMB funds were raised in 2015 and 2017, each at 3 billion yuan. Selina Zheng, CEO of the fund manager, said during the China Venture Capital & Private Equity Forum in December that DCL Investments had invested 70 billion yuan across 68 projects, and had recovered 4 billion yuan of the assets.
Commenting on China’s distressed asset industry, Zheng said, the local development was about ten years later than overseas markets. However, according to her, the opportunities for investments in this type of asset class is great.
“The supply of the domestic distressed asset market covers from the primary to the secondary market, from bond to property and equity. The overall supply is very large,” she said.
Meanwhile, compared to other PE strategies, the players in this industry were very limited, she added. In addition, restructuring will become a very big trend. “This is a blue ocean investment market,” said Zheng.