China’s CreditEase mulls investments in KKR, Blackstone

The Beijing-based financial services company, which is raising a $200m private equity fund, will be targeting investments in North America and Europe as well as Asia.

Beijing-based financial services company CreditEase is eyeing investments overseas as it raises a $200 million hard-cap private equity fund, and is considering investing in funds managed by private equity powerhouses KKR and Blackstone.

“As part of the broader pipeline, we are considering KKR and Blackstone products as some of our potential investments,” Seungha Ku, head of global private equity at CreditEase, told Private Equity International in an emailed response. Ku did not specify which products.

KKR and Blackstone are among CreditEase’s partners for CreditEase Global Secondary Fund, which will target investments in consumer, telecommunications, media and technology, and healthcare and industrial sectors, according to a Bloomberg report.

In addition to investing in primary funds, CreditEase Global Secondary Fund will also invest in secondaries, and is also seeking co-investment opportunities.

CreditEase already manages two other venture funds – a $30 million 2015-vintage Israeli Innovation Fund, which invests in start-ups in Israel and the US, and a $100 million fund with venture capital firm IDG Capital, which targets Chinese start-ups focusing on the fintech sector.

For its latest fund, CreditEase is looking for deals overseas, Ku said.

“We are currently evaluating a wide range of investment opportunities by diversifying across geographies, with over 50 percent in North America and the rest in Europe and Asia,” Ku said.

CreditEase Global Secondary Fund will be marketed mainly to mainland Chinese investors, and aims to collect a minimum investment of $150,000.

CreditEase’s evolution – it was founded in 2006 as a peer-to-peer lending platform, offering micro-credit to entrepreneurs and students, and expanded into wealth management in 2011 – reflects rapid growth in the number of China’s high net worth individuals. Indeed, between 2012 and 2014, the private wealth market in China grew by 16 percent annually, and reached 112 trillion renminbi ($17 trillion; €15 trillion) in 2014, according to a report by Bain & Company.

CreditEase is not using a placement agent to help raise the fund, and there is no cornerstone limited partner who has anchored the fundraising, Ku said. KKR and Blackstone declined to comment on the fundraising.

CreditEase is backed by Morgan Stanley’s private equity arm in Asia, Beijing-based venture capital firm IDG Capital Partners, and Menlo Park-based Kleiner Perkins Caufeld & Byers.

In June, CreditEase raised $80 million from its clients to buy consumer loans made from internet lending platforms, including San Francisco-based Prosper Marketplace and Chicago-based Avant.

In other news, CreditEase recently appointed Anju Patwardhan as venture partner for its $100 million fintech fund. She joins the firm from Standard Chartered Bank, where she served as global innovation innovation officer. Patwardhan will not be involved in this fundraise, a spokesperson for CreditEase said.

There is no specific timeframe for the current fundraising, Ku said.