China Renaissance holds over $600m first close on latest RMB fund

The boutique investment bank has raised more than half of its intended target of up to $900m for the RMB Fund III in less than six months.

Huaxing Growth Capital, the asset management arm of the tech-focused investment bank China Renaissance, has held a first close on its latest yuan-denominated fund on 4 billion yuan ($604 million; €510 million).

Huaxing began fundraising for RMB Fund III in mid-2017. It is targeting to raise between 5.5 billion yuan and 6 billion yuan at final close, which it expects to hold in early 2018, a spokesperson for China Renaissance told Private Equity International.

The target fundraise, if achieved, will make RMB Fund III the largest vehicle raised by the firm to date. Its predecessor, the 2015-vintage RMB Fund II, closed on 5.4 billion yuan and is currently being invested.

Similar to Huaxing Growth’s previous funds, investors that have committed to Fund III so far are all onshore Chinese LPs, although the investor base has expanded to include new banks, insurance companies and funds of funds, the spokesman added.

In terms of sectors, the firm is planning to deploy the fund’s capital in deals centred on technology, media and telecom, as well as upgrades to consumer lifestyle, and industrial transformation through automation, artificial intelligence and machine learning.

Huaxing Growth Capital expects to make larger investments than it has in the past, in the range of $20 million and $70 million per investment, in which the firm has a board seat and more engagement with management of the company.

The firm is also in the process of investing its two USD-denominated funds, although the spokesman declined to provide details on these two. Temasek-backed Pavilion Capital as well as some Taiwanese financial institutions are investors in Huaxing Growth’s USD funds.

Huaxing Gowth Capital has assets under management of close to $3 billion. It has previously backed real estate online platform 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 e-commerce company