Huaxing Growth Capital hits first close of RMB Fund IV at $448m

Photo by Chapman Chow on Unsplash

China Renaissance’s Huaxing Growth Capital on Tuesday announced the first close of its fourth RMB-denominated fund at 3 billion yuan ($448 million).

The RMB Fund IV secured capital commitments from China’s government-guided funds, funds of funds, financial institutions, family offices, as well as companies and entrepreneur partners in the China Renaissance ecosystem.

The China-focused private equity (PE) investment arm of Hong Kong-listed financial institution China Renaissance has an investment mandate to focus on smart manufacturing, digital health, technology, corporate services, and new consumption as it expects to see “a wave of intelligent economy sweep across China,” said Huaxing Growth Capital in a statement obtained by DealStreetAsia.

Huaxing Growth Capital, which manages four USD funds and four RMB funds, said that it also reached a new closing of its fourth USD fund at nearly $800 million, exceeding the $600 million-plus predecessor fund. Its USD Fund IV announced its first closing at almost $550 million in October 2021, with a target to raise $1.2 billion in total.

China Renaissance’s website shows that Huaxing Growth Capital booked $5.8 billion in assets under management (AUM) as of December 31, 2021.

Since its inception in 2013, Huaxing Growth Capital has built a portfolio of companies including genetic sequencing firm MGI Tech, EV battery manufacturer SVOLT, EV brands Li Auto and NIO, toymaker Pop Mart, biopharmaceutical firm WuXi AppTec, and medical device developer MicroPort.

“International capital remains confident in the prospect of generating good investment returns from the Chinese market. Global LPs (limited partners) are still actively investing in China’s top-tier USD funds,” Bao Fan, founder, chairman and CEO of China Renaissance, wrote in an open letter to investors on Tuesday.

“With the acceleration of a new round of technological and industrial revolution, the traditional economy is embracing full-scale penetration of digital solutions. We have reasons to believe that [China’s economy] is in a rising wave to become more intelligent with the next decade expected to bring innovation opportunities and applications of intelligent technologies across all walks of life,” he wrote.

Bao founded China Renaissance as a financial advisory firm in 2005 and grew the firm into a financial institution consisting of investment banking, investment management, M&A advisory, wealth management, and others.

China Renaissance, which started trading its shares on the Hong Kong stock exchange in 2018, reported total revenue and net investment gains of 2.5 billion yuan ($371.8 million) for the whole year of 2021. Its net profit attributable to shareholders stood at 1.6 billion yuan ($238 million), up 56.5% from 2020.

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