Eastern Link closes China fund on $330m

The firm raised 2 billion RMB in a tough fundraising environment.

Eastern Link Capital, has closed its second RMB fund on 2 billion RMB (€243 million; $330 million), according to Xiongwei Zhou, partner at the firm.

The fund’s anchor investor is Guochuang Yuanhe, a joint venture fund of funds between China Development Bank and Suzhou Ventures Group.

The fund closing comes at a time when RMB fundraising has dropped dramatically. In 2013, RMB funds raised only 11.3 billion RMB (€1.37 billion; $1.9 billion), down about 60 percent from the 38.3 billion RMB raised in 2012, according to Private Equity International's Research & Analytics division.

Zhou said the RMB fundraising trail was not easy. “China's IPO market has been stalled and LPs are hesitant to invest in private equity funds,” he said. 

However, he believes his firm stood out from the crowd of domestic firms because of its US orientation. Two of the firm’s six partners are based in Boston, where they look for synergies between US technology companies and Chinese companies. In addition, co-founders Yudong Hou and Gang Lin previously worked at IDG Ventures.

Eastern Link intends to raise its first US dollar fund, possibly by the end of this year, Zhou added.

Eastern Link Capital, based in Suzhou Industrial Park near Shanghai, seeks late stage and middle market investments in China targeting the consumer, IT, biotech and new energy sectors. The firm also has offices in Beijing and in Boston.