FountainVest Partners, a China-focused private equity firm led by former Goldman Sachs Group banker Frank Tang, has filed with the US Securities and Exchange Commission (SEC) to raise a new USD-dominated PE fund.
The filing did not specify the target for FountainVest Capital Partners Fund IV LP but its predecessor raised $2.1 billion in 2016, which was significantly larger than the second fund that closed in 2012 at $1.35 billion.
Fund III was oversubscribed, with commitments from its existing investors as well as a number of new high-quality institutional investors. In 2018, the PE firm reached the final close of its debut RMB-dominated vehicle at 1.7 billion yuan ($246.5 million).
FountainVest, founded in 2007, has been a major investor in China’s media and entertainment industry. It invested in movie-screen company IMAX’s China division and in Chinese advertiser Focus Media.
Its portfolio also includes Chinese tech firm Sina Corp, Key Safety System, Kehua Bio Engineering, real estate platform Fangdd.com, and sporting goods firm Amer Sports.
“Our investment strategy has consistently focused on businesses that benefit from the secular growing needs and rising aspirations of the expanding Chinese middle class, adhering to disciplined deal selection and execution standards,” the company said on its website.
FountainVest now joins a number of Chinese firms that have raised or are raising PE funds focused on China. In May, China Merchants Capital, launched a PE fund with a corpus of 1.8 billion yuan ($255 million) to invest in growth-stage startups in China.
Shanghai-headquartered investment bank Bojiang Capital, meanwhile, raised more than 800 million yuan ($113 million) for its latest private equity fund, per a company statement.
Chinese firms continue to raise PE funds even as dealmaking in the private markets in the Asia Pacific has been on a downward trend last year, weighed down by macro issues in China.
According to a report by global advisory firm Bain & Co, the softening Chinese economy and stringent asset management rules in the country weighed on PE deal activity in the region in 2019.
The report said deal value in the Asia Pacific slumped to $150 billion in 2019, 16 per cent down from $178 billion the year before (2018).