China Renaissance plans to raise a $100 million venture capital fund, according to a filling with the US Securities & Exchange Commission (SEC).
The fund, called Huaxing Capital Partners, is domiciled in the Cayman Islands and has yet to raise any capital.
The new vehicle is the independent bank’s first foray into alternative assets, typically acting as an advisor to entrepreneurs or financial sponsors in China, according to Private Equity International’s Research & Analytics division.
Founded in 2004, China Renaissance's notable private equity-related deals have included advising the founder of AsiaInfo-Linkage, Edward Tian, on his tie-up with CITIC Capital Partners to privatise the NASDAQ-listed business in an $890 million deal in May. The bank also advised China Auto Rental in its $200 million fundraise from Warburg Pincus in July 2012, according to the firm.
The fund is expected to target US investors given the SEC filing and is likely to invest in the TMT, healthcare and education sectors in China – the core business areas China Renaissance focuses on from its offices in Beijing, Shanghai, Hong Kong and New York.
The firm was not available for comment at press time.
While China’s venture capital market is one of Asia’s most attractive, dealflow has declined recently.
China Renaissance dials in to China's
The value of venture capital investments in China dropped more than 40 percent year-on-year in 2012, to $3.7 billion from $6.3 billion, having previously recorded two record years since 2010. The number of funding rounds in the country also declined 44 percent to 202 versus 362 during 2011, according to a report from Ernst & Young.
However, industry sources have said there was too much capital chasing too few deals in China’s venture capital market previously. Vincent Lauria, managing partner at Golden Gate Ventures, said, “China's venture capital interest grew too rapidly – it was a bubble. It's healthy that it has cooled down.”