Huaxing Growth Capital, the flagship fund of investment bank China Renaissance, has held the first close for its fourth US dollar-denominated fund at nearly $550 million. The firm seeks to raise $1.2 billion for the vehicle.
The USD fund secured capital commitments from investors based in Europe, Singapore, Japan, Greater China and the US for its first close, Huaxing Growth Capital said in a press statement.
New limited partners (LPs), including sovereign wealth funds, international banks, and family offices, contributed to one-third of the committed capital. The firm said that over 70% of existing LPs in its previous three USD funds re-upped, or even upsized, their commitments to Fund IV.
Its predecessor fund closed at over $600 million in September 2020. Fund III could write cheques of up to $50 million per transaction.
The new fund has started deploying capital, targeting opportunities in what it calls China’s “smartisation trend.” Huaxing Growth Capital mainly invests in growth-stage companies across the fields of intelligent healthcare, smart enterprise services, advanced technology, and new economy-focused consumer brands, shows its website.
China Renaissance was established in 2005 by Bao Fan, one of China’s most famed rainmakers. Its shares are listed on the Hong Kong stock exchange after a $346 million initial public offering (IPO) in September 2018.
The firm’s businesses range from private placement advisory, M&A advisory, and direct investment to equity underwriting, asset management, and wealth management.
The firm launched the investment management branch in 2013, which now operates under Huaxing Growth Capital and Huaxing Healthcare Capital with the latter investing in the high-end medical consumables, biotech, and consumer health sectors.
Its portfolio companies include food delivery giant Meituan, ride-hailing firm Didi Global, medical tech platform WuXi AppTec, and big data firm MiningLamp Technology, to name just a few.
As of June 30, 2021, its investment management business booked about 61.7 billion yuan ($9.6 billion) in total assets under management (AUM). Its multiple on invested capital (MOIC), a metric that compares an investment’s current value to the amount of money initially invested, stood at 4.3, while the internal rate of return (IRR) was 54% as of the same date.