Daiwa to invest in Fang’s Hopu Fund

The Japanese financial services conglomerate is committing $100m to Hopu Investment Management, the China-focussed private equity firm founded by Goldman executive Fang Fenglei.

Daiwa Securities Group, one of Japan’s largest securities brokerages, and Daiwa Securities SMBC, an investment banking joint venture between Daiwa Securities and Sumito Mitsui Financial Group, are investing $100 million (€64 million) in Hopu USD Master Fund I.

The fund is targeting total commitments of $2.5 billion, the firms said in a statement, $500 million more than what earlier reports had suggested. It is managed by Hopu Investment Management, a private equity firm established by Goldman executive Fang Fenglei.

Daiwa Securities is investing $80 million in the fund and Daiwa Securities SMBC is committing $20 million to the fund, the firms said.

The Hopu fund makes investments in China, and is focussed mainly on opportunities arising from the restructuring of state-owned enterprises and the rapidly growing private sector in the country.

It was established in 2007 and Singapore’s sovereign wealth fund Temasek Holdings and Goldman Sachs are believed to have invested in the fund, with commitments of $1 billion and $300 million respectively.

Hopu Investment Management reportedly made its maiden investment in April earlier this year when it invested $300 million alongside Temasek Holdings in a Mongolian mine.