FountainVest Partners has made a final close on the $1.35 billion hard-cap for its second private equity vehicle a week prior to its AGM in Hong Kong, PE Asia has learned.
The fund, which was launched in March and made a first close on just above $1 billion in June, originally targeted $1.25 billion. FountainVest used UBS as a placement agent.
FountainVest China Growth Capital Fund II was “heavily oversubscribed” with an over 90 percent re-up rate from the firm's existing investors, according to a source close to the matter. The fund hasn’t marketed since June, but has been working out how much each remaining investor would be able to commit to the vehicle, the source said.
Investors in Fund II included the Canada Pension Plan Investment Board, Temasek Holdings and Ontario Teachers' Pension Plan. The source also said many Fund I LPs increased their commitments in the second offering. Washington State Investment Board, which committed $50 million to FountainVest’s first vehicle, has committed $150 million to Fund II.
The fund will employ the same investment strategy as its $950 million previous vehicle, which primarily invested in high growth businesses in China.
Fund I is not fully invested yet, but the firm is believed to be assessing two large public-to-private deals that could deploy all the remaining capital in the fund.
Although few investments have been realised from the first vehicle, it generated a 14 percent net internal rate of return and a 1.2x total value multiple as of 30 September 2011, according to documents from the Washington State Investment Board obtained by sister publication Private Equity International earlier.
FountainVest was founded in 2007 by Frank Tang, Terry Hu, George Chuang and Chenning Zhao. The firm has offices in Shanghai, Beijing and Hong Kong.