New Economy Investor China Renaissance Raises Over $600 Million for Third Dollar Fund

(Deal Street Asia) — Investment bank China Renaissance announced on Thursday the final closing of Huaxing Growth Capital’s third dollar-denominated fund with over $600 million in committed capital.

Huaxing Growth Capital is the dual-currency, private equity arm of China Renaissance.

USD Fund III received capital commitments from global institutional and individual investors across Europe, Asia, and the Middle East, including sovereign wealth funds, commercial banks, funds of funds and family offices.

Given the new capital raised, Huaxing Growth Capital’s single investment size can now be up to $50 million, China Renaissance said in a statement. The vehicle will continue to focus on growth-stage, new economy companies that are benefitting from the structural evolution of technological innovations, consumption upgrade, and industrial transformation.

The fund was closed amid “mounting geopolitical uncertainties and a global pandemic,” said Bao Fan, chairman and CEO of China Renaissance, who is also the founding partner & CIO of Huaxing Growth Capital.

“In spite of the persisting global pandemic, China’s economy — especially the new economy sectors — have outperformed the global market, demonstrating resilience and huge potential with exceptional growth. China has become the world’s largest single market of internet-related industries where innovative companies are increasingly favored by global investors,” John Hsin, managing partner of Huaxing Growth Capital, said in the statement.

“China’s new economy sectors are still at an early stage of development. We will continue to broaden our global perspectives and strengthen our capabilities to provide full-cycle financial services to the best entrepreneurs,” said Hsin.

China Renaissance launched its investment management business in 2013 and currently manages Huaxing Growth Capital and Huaxing Healthcare Capital. The latter invests in medical devices, medicines, and healthcare services.

China Renaissance has invested in over 100 new economy entrepreneurs and home-grown companies over the past seven years and has helped over 30 of these firms go public in China and international markets. Its private equity funds recorded an average multiple of invested capital of 2.5 times and internal rate of return of 33% as of June 30.

The final closing of the USD Fund III follows the completion of Huaxing Growth Capital’s RMB Fund III at over 6.5 billion yuan ($951 million) in July 2019 with oversubscription of more than 1 billion yuan.

To date, China Renaissance’s private equity funds have about 40 billion yuan in total assets under management.

Huaxing Growth Capital now manages a total of six private equity funds, including three U.S. dollar funds and three yuan funds. Its portfolio companies include Meituan-Dianping, Didi Chuxing, WuXi AppTec, MiningLamp Technology, and Medlinker.

Despite the challenging market conditions in 2020, China Renaissance has backed a number of companies across various sectors, such as eRoad Software, Xingsheng Youxuan, MGI Tech (Huada Zhizao), HiRain Technologies and

Insgeek. Some of its portfolio companies, including Li Auto, Beike Zhaofang and Dada Group, went public earlier this year.

China Renaissance, a bellwether of new economy investments in China, serves as a financial institution that provides private placement advisory, M&A advisory, direct investment, equity underwriting, asset management, wealth management and other financial services.

The firm delivers services across mainland China, Hong Kong and the United States with over 600 employees. As of June 30, 2020, China Renaissance had advised on about 980 transactions worth over $146 billion since its inception.

This story was originally published by Deal Street Asia

Contact editor Yang Ge (geyang@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.