Emerging market fund investment specialist EMAlternatives has launched an RMB-denominated fund of funds to invest in Chinese venture capital and growth capital funds.
The target commitment of the fund was not disclosed. EMAlternatives could not be reached by press time.
According to a company statement, the fund of funds, which will be managed under YiMei Capital Management, has been awarded an intial RMB500 million (€54.72 million; $75.28 million) by the MinHang district of Shanghai Municipal Government.
“This effort is a natural extension of our existing work in China, and will allow us to offer to clients both RMB and international-currency denominated investment opportunities,” Christopher Wright, chairman of EMAlternatives, said in the statement.
Judy Qing Ye, director of the firm and head of its Shanghai office, will be appointed as a managing partner of YiMei Capital.
The launch of EMAlternatives’ RMB FoF vehicle comes as professionals are predicting China will see a growth in the number of domestic fund of funds to cater to the growing number of inexperienced LPs.
“There is still huge potential for the growth of Chinese asset management. When we have the environment for funds of funds to grow, it will happen,” said one high-ranking Beijing-based investment professional recently.
In September, Chinese state-backed private equity firm Suzhou Ventures Group launched two funds of funds – one to invest in venture capital funds, the other to invest in private equity funds. Together the funds are targeting a total of RMB15 billion.
China’s $120 billion Social Security Fund (SSF), insurance giant China Life and China Development Bank have all shown interest in committing to funds of funds.
Founded in March 2007, Washington- and Heemstede-based EMAlternatives opened its Shanghai office in November 2008. The firm specialises in building customised investment portfolios for large institutional investors that want exposure to emerging private equity markets.
The California Public Employees' Retirement System (CalPERS) became the first investor in EMAlternatives with a $100 million commitment in July 2007.