Bocom joins Chinese private equity boom

The Hong Kong-based investment arm of China’s Bank of Communications has launched its debut private equity fund, which aims to raise up to $500m for a first close by May.

Bocom International Asset Management, the investment arm of China’s Bank of Communications, is raising its debut private equity fund.

The China-focused fund plans to raise between $250 million and $500 million in its first funding round in the next three months, according to a Bocom spokesman. The fund’s final target size is yet to be confirmed, he added.

Including the parent bank’s own investment in the fund, which a Reuters report estimated between 15 and 20 percent, the fund has raised HK$400 million ($51 million; €37 million) thus far. Two thirds of the investors are from Asia while the remainder are from the US and Europe, said the spokesman, adding that the firm is targeting high net worth individuals and institutional investors.

The fund will invest between $10 million and $50 million per deal in China’s domestic consumption, railway, healthcare and new energy sectors and will target an internal rate of return of 35 percent. It will be steered by Simon Hua, Bocom International’s private equity chief, together with an investment team of around 10 investment professionals, the spokesman added.

Other Chinese institutions that have recently raised offshore private equity funds include CITIC Capital, which closed its second buyout fund on $925 million this week; and CCB International, which aims to raise $1 billion for a financial sector-focused private equity fund.