Ex-KKR team raises sixth biggest China fund since GFC

The firm was founded by two former KKR partners including David Liu, who was co-head of KKR Asia and chief executive of the firm’s China business until 2017.

A team of KKR alumni have raised the joint-sixth largest fund dedicated to China since at least before the global financial crisis.

DCP Capital closed Fund I this week, collecting $2.5 billion across separate vehicles, according to a statement.

The fund exceeded its $1.5 billion target to close on its $2 billion hard-cap, a source with knowledge of the fund told Private Equity International. The remaining capital was raised in a parallel yuan fund to target deals and industries that aren’t feasible for non-local dollar investors, the source noted.

DCP declined to comment beyond the statement.

The firm was founded in 2017 by two former partners at KKR, including David Liu, who was previously co-head of KKR Asia and chief executive of the firm’s China business.

Fund I is the joint-sixth largest vehicle raised for China since PEI records began in 2008. The fund is equal in size to the 2007-vintage Hopu Master Fund I and 2018-vintage YuFeng Fund III, and just shy of Hony Capital’s $2.7 billion Fund VIII, a 2016-vintage.

DCP’s fundraise can be attributed in part to the team’s extensive track record. Liu and co-founder Julian Wolhardt have been colleagues since 1997, having run Morgan Stanley’s private equity business in Asia and China before joining KKR. Three of DCP’s partners – including Wolhardt – were partners at KKR and a fourth worked alongside Liu and Wolhardt at Morgan Stanley.

Limited partners the team knew from KKR’s Asia business committed to Fund I, the source noted. North America and Asia accounted for the lion’s share of capital with the remainder coming from Europe and the Middle East.

DCP employs around 23 front-office staff across Beijing, Hong Kong and New York. It will target equity cheques of at least $100 million across 15 to 20 businesses linked to domestic consumption, such as food safety, healthcare and financial services in Greater China.