DCL Investments, a distressed asset investment firm backed by Chinese alternative asset manager CDH investments, announced on Tuesday the completion of a new RMB-denominated fund at 3 billion yuan ($454.5 million).
About 95 per cent of the new fund’s limited partners (LPs) are institutional investors, including insurance companies, banks, securities companies, state-owned enterprises, investment platforms funded by Chinese regional governments, funds of funds (FOFs), university endowments, and family offices, said the firm in a WeChat post.
The closing of the fund comes as fund managers worldwide have stepped fundraising efforts in anticipation of potential defaults accelerated by a global market downturn caused by the COVID-19 pandemic.
Combining distressed debt, special situations, and turnaround strategies, dry powder in the overall distressed private capital space reached an all-time record of $131 billion globally as of June 2020, according to data from Preqin. Distressed investors raised a combined $9.6 billion in Q2 2020, the highest in two years.
Founded in 2015, DCL Investments focuses on China’s distressed asset investment opportunities, covering non-performing loans (NPLs), distressed real asset restructuring, distressed corporate restructuring, and beyond.
Geographically, the firm mainly invests across eastern China’s Yangtze River Delta, northern China’s Pearl River Delta, and first-tier cities including Beijing, Shanghai, Guangzhou, and Shenzhen.
DCL Investments’ first two funds each raised 3 billion yuan in 2015 and 2017, respectively. According to its website, the firm currently manages several RMB and USD-denominated funds with about $1.5 billion in total capital commitments.
The firm has offices in Beijing, Shanghai, Shenzhen, Hangzhou, and Nanjing. It plans to build a presence in Hong Kong.
In February 2020, DCL Investments invested in the restructuring of Dongguan Fenghai Ocean Shipping Co Ltd, a Chinese provider of inbound and outbound shipping services of petroleum products and chemicals.
Fenghai Ocean became a wholly-owned entity of DCL Investments after the transaction. Financial terms of the deal were not disclosed.
