China Renaissance eyes more overseas capital by 2020

The Beijing-based investment bank expects foreign investors to contribute up to 40% of its $10bn AUM target in the next three years to fund direct deals and co-investments.

To fund direct deals and co-investments, China Renaissance, a technology-focused investment bank, is set to ramp up capital raising from overseas investors.

The firm, which manages over $3 billion of assets across USD and RMB funds, aims to grow its assets under management to $10 billion by 2020. Of that target, China Renaissance expects between 30 percent to 40 percent to come from overseas investors such as sovereign wealth funds, hedge funds, and asset managers in North America, the Middle East, and the broader Asia region.

The bank’s current investors include, funds of funds, family offices, financial institutions, corporations, and high-net-worth individuals, mostly from China.

The firm expects to reach its AUM target by building these part of the its growth capital, mezzanine and healthcare platforms – raising new funds within each of them – as well as by launching funds for new strategies, including hedge fund strategies, a spokesperson for China Renaissance said.

Technology, media and entertainment, healthcare and life sciences are the bank’s focus areas.

“The asset management business has grown naturally from our proprietary investing and our focus on supporting entrepreneurs contributing new sources of economic growth in China,” said Fan Bao, chairman and chief executive of China Renaissance, said. “The maturation of China’s market – with disruption in both consumer and business-to-business verticals, abundant capital, and the vast scale at which innovations come to market – has created unique opportunities and challenges for entrepreneurs and investors.”

Its private equity investment platform, Huaxing Growth Capital – also known as New Economy Fund – manages $2.86 billion of assets, across USD and RMB funds. Huaxing has backed Chinese online accommodation booking platform Tujia in its $300 million Series E fundraising round; Lianjia, an online platform for real estate transactions; Zhaogang, an online exchange for commercial steel trading; and JD Finance, the internet-based financial services unit spun off from the e-commerce company

Another unit, Huaxing Healthcare, was launched in late 2016 to make private equity investments in medical device and biotechnology companies. The unit has already invested most of the over $200 million it has raised, China Renaissance said in a statement.