China-focused PE FountainVest in the market for fourth USD fund

Shanghai, China. Source: Ralf Leineweber/Unsplash

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).

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.