Chinese private equity funds are aiming to raise record funds this year as global investors have increased their exposure to the country despite US tensions and increased regulatory investigations by their technology groups.
A group of fast-growing Chinese investment funds, including Air Capital and Primevera Capital Group, have launched what is expected to be their largest US dollar fund in recent weeks.
According to some people close to the plan, Boyu, which is co-led by the grandson of former Chinese President Jiang Zemin, is targeting a new $ 6 billion fund. Two people close to the group said Primevera b, led by Fred Hu, the former chairman of Greater China at Goldman Sachs, is raising up to 5 5 billion in new funding.
The funds will be the largest and second largest US dollar fund launched by an independent investment manager in China, according to data provider AVCJ.
Meanwhile, Fountainvest Partners, which targets China deals and is led by former Goldman Sachs banker Frank Tang, wants to raise $ 3.5 billion for the new fund, according to two people familiar with the plan.
The stimulus to raise money comes from China Strong economic recovery Concerns about high prices from Covid-19 and the public market
They follow large-scale initiatives similar to regional and global funding more broadly in Asia this year. Hong Kong-headquartered Bearing Private Equity Asia opened a new fund of more than 6.5 billion last month, while Hong Kong-based Hillhouse Capital is raising a target of বৃহত্তম 13 billion to raise Asia’s largest US dollar.
On Tuesday, US-based KKR announced that it had raised 15 15 billion for the Fourth Asia Pacific Fund – a fund record in the region – exceeding its target of .5 12.5 billion.
“Companies across Asia Pacific are recognizing the potential to be global leaders in their industry, not just national and regional champions,” said KK Ashish Shastri, head of private equity at Asia Pacific.
Wealthy Asian investors, one of the most influential families in the region, say China’s domestic PE market is developing extremely fast, especially in US dollar funds. “[Funds’] Bates has started to show a lot of commitment and has achieved success in many areas, ”the person said.
According to several people close to the fund, the fundraisers are also a sign of the appetite of Chinese companies in the United States and the Middle East, especially for investors in technology and healthcare.
The influx of new capital, centered on China, came after a rigorous regulatory investigation by Chinese technology groups that could tarnish the sector’s outlook and limit growing sanctions between Washington and Beijing.
“We’ve seen big increases in allocations in recent months and we’ve seen an unprecedented amount of U.S. dollars coming into the fund last year,” says the founder of a huge Chinese private equity fund. “We are expanding rapidly, even asking some of our investors to cut their subscriptions,” he added.
The recent rise has more than doubled the size of China’s average fund to $ 756 million, according to data provider Prekin. It has also maintained the trend of capital decline in Asia funds in recent years.
Fundraising activities declined for the third year in a row in 2020, according to a report by Consulting Ban. Asia-centric funding rose $ 90bn last year, Bain said, per4 percent less than the 201st peak. However, according to Bain, private equity-backed transactions in the region rose 19 percent to a record 175 billion.
Both Vayu and Primevera were early investors in Jack Ma’s Ant Group and have continued to invest in Chinese technology start-ups.