HAO tops up China cleantech deal

The China country manager has upped its initial investment in a company that outfits China's coal plants with emission reduction equipment.

HAO Capital has co-invested in a $20 million third-round transaction involving LP Amina, an environmental engineering company that operates in China, according to a company statement.

The firm, together with Qiming Ventures, put up $10 million and the remaining half was from WLR China Energy Infrastructure Fund and Keytone Ventures, Elaine Wong, partner and co-founder of HAO, told Private Equity International

LP Amina provides emission reduction equipment for coal plants in China. The investment will help LP Amina expand the company’s engineering and field service teams “to keep up with rising customer demand on its core emission reduction business in China”, according to the statement.

Valuations have come down, in some cases up to 30 percent. It’s connected to the frozen IPO market. But you also see a lot of RMB funds consolidating or not really putting capital to work, so there is less competition in the market

Elaine Wong, partner, HAO

In 2010, HAO made an undisclosed second round investment in the company. “With the growth it has achieved since then we are delighted to invest further to help drive its future development and help address the multiple challenges the energy industry is facing today,” Wong said in the statement.

HAO has made previous cleantech investments in waste management and water treatment companies, according to the firm.

The capital came from HAO Capital II, a $400 million vehicle with a 2008 vintage, which Wong said is more than half invested.

The firm is in talks for more investments, including possible add-on acquisitions for its portfolio companies, she said. 

She added that the investment climate in China has noticeably changed since one year ago. “Valuations have come down, in some cases up to 30 percent”, Wong said. “It’s connected to the frozen IPO market. But you also see a lot of RMB funds consolidating or not really putting capital to work, so there is less competition in the market.”

Based in Beijing, HAO Capital is a China-focused growth capital firm.  Founded in 2005, the firm manages total assets of $500 million across two funds. It targets investments in consumer, healthcare and light industrial, which includes cleantech.