HK-based Genesis Capital hits final close of China-focused second fund at $850m

Photo from Genesis Capital's website.

Hong Kong-based private equity firm Genesis Capital has announced the final close of its China-focused second fund – Genesis Capital Fund II – at $850 million, exceeding its $750-million hard cap.

The second fund, which was launched in May 2018, secured commitments from pension funds, sovereign funds, insurance firms, foundations, and other institutional investors, Genesis Capital said in a statement.

Genesis Capital Fund II will invest in growth stage Internet companies. The fund had an initial target of $600 million when Genesis first filed the offering with the SEC.

It made the first close of the second fund in August 2018 at $566.36 million.

The second fund will invest in companies utilizing information technology to improve the overall efficiency of various industries, including e-commerce, B2B platforms and enterprise services, education, healthcare, and logistics.

The International Finance Corporation (IFC), a member of the World Bank Group, said in May that it was considering an investment of up to $120 million in the latest China-focused private equity fund of Genesis Capital.

Genesis said the continued penetration of information technology, combined with the multi-tiered market in China, will create diverse innovation opportunities for entrepreneurs.

“We will continue to remain focused and disciplined in this market, leverage our industry knowledge, and network to support our companies across strategy, product, operations, talent, and M&A, and create value for our companies as well as our partners,” said Genesis Capital founder and managing partner Richard Peng.

Peng worked three years at Google and seven years at Internet giant Tencent Holdings, where he led investments in over 300 Internet companies globally, including Didi, JD.com, 58.com, and Little Red Book. Genesis Capital currently manages four funds, including two RMB and two USD funds.

Founded in 2015, Genesis invests in and adopts a hands-on approach to its portfolio companies in order to achieve long-term capital appreciation and maximize valuation both before and after the initial public offering.

The Chinese growth capital firm raised its first fund of $400 million in 2016. Genesis Capital Fund I generated over seven unicorns out of a 13-company portfolio, and orchestrated the mergers of Tantan and Momo as well as Huochebang and Yunmanman.