Private equity in China will soon see more activity from a new class of up-and-coming general partners.
Some from our list have carved out a specialised niche focus, like healthcare deals, or focused on control buyouts among first-generation entrepreneurs.
Common themes in our selection include founders who are veteran dealmakers in their previous employers, an international LP base, buyout execution capability, deep roots in the local market and investment strategies that tap opportunities from China’s swelling consumer market.
“For these funds, the principals all have a successful investment track record with their previous firms,” said Edmond Ng, co-founder of fund of funds manager Axiom Asia. “They are able to raise sizeable funds, and will no doubt make an impact on the market.”
While the firms in our list haven’t (yet) raked in impressive returns – a lot of them are still raising capital for their debut funds – China watchers and investors say these five firms are the industry’s rising stars.
5. Centurium Capital
Founded by ex-Warburg Pincus head of China David Li, Centurium launched its debut fund targeting $1 billion in February and has already raised $925 million from an investor base that includes sovereign wealth funds, funds of funds and family offices from Asia, North America and Europe. The firm plans to allocate up to 45 percent of the fund to control deals and 55 percent for minority growth and control deals focused on consumer and healthcare – “a strategy Li has been executing his whole life”, a source with knowledge of the fundraise told Private Equity International. Li’s partners at Centurium include Joseph Chow, former managing director of Moelis & Company, and Lei Lin, chairman and founder of automotive research provider TNS Sinotrust. Centurium is eyeing a final close by year-end on its $1.5 billion hard-cap.
4. Dehong Capital Partners
Former KKR senior executives David Liu and Julian Wolhardt quit the private equity giant in 2016 and set up DCP a year later. Liu, previously co-head of private equity and Wolhardt, ex-partner and regional leader of China, have a combined 24 years of investing in the country. DCP is reportedly seeking $1.5 billion for its debut offering. The New York State Common Retirement Fund through Asia Alternatives IV made a $25 million commitment to the fund. Capital raised will be invested in five core sectors – consumption upgrades, healthcare, education, environmental protection and internet-plus transactions – themes the pair know well after years of leading KKR’s China buyouts including China Modern Dairy, Qingdao Haier, Far Eastern and COFCO Meat.
3. Nexus Point Partners
Nexus was set up by former MBK Partners rainmaker KC Kung. He was previously co-founder, partner and head of Greater China at MBK and managing director and head of the Shanghai office of Carlyle Group, garnering a more than two-decade track record in deal sourcing in China, Taiwan and Hong Kong. Kung is joined by Richard Wong, former Morgan Stanley co-head of M&A in Asia and Min Li, who led Bain Capital Asia’s healthcare practice. Nexus Point is said to be seeking $750 million for its maiden fund.
2. Rivendell Partners
Alex Ying, a 20-year veteran and former managing director at Carlyle Group, founded the firm last year. At Carlyle he focused on opportunities in Greater China and Vietnam as part of its Asia Buyout Fund. Ying told PEI he decided to set up his own firm after seeing a gap in the mid-market buyout space in China. It is understood the firm is said to be targeting up to $500 million for its debut vehicle. Ying declined to comment on fundraising. A self-confessed Tolkien fan, Ying says “Rivendell is all about camaraderie and teamwork – it’s the headquarters of the good guys in the fellowship.”
1. C-Bridge Capital
Although not a first-time fund, C-Bridge makes the cut for its sector-specialisation. The healthcare-focused firm is in market with its third and largest fund targeting $650 million and held a first close on $400 million in July. Just six months ago, C-Bridge closed its second private equity fund on a hard-cap of $400 million. Founded by ex-Temasek executive Wei Fu, C-Bridge focuses on development and late-stage investments in pharmaceuticals, medical devices, diagnostics and healthcare services. Another investment strategy for the firm is to acquire intellectual property overseas and bring it to the local market. The firm’s investor base includes Singapore-based Pavilion Capital, family foundations, and other institutional investors from the US, Asia, Middle East and Europe.
For more on China, go to our special supplement.
For our presentation on how to ride the buyout wave in the country, click here.