Highsun, Hesi launch RMB1.5bn China fund

Hesi will manage the vehicle, which will focus on internet and entertainment investments

Guangdong Highsun Group, a Shenzhen-listed commercial property and chemical manufacturer, plans to list an RMB 1.5 billion ($245 million; €195 million) private equity fund to invest in China’s internet and entertainment sectors, according to a regulatory filing.

The fund, Haihe Entertainment & Internet Equity Investment LP, will invest in both private companies and in PIPE (private investment in public equity) deals in China’s domestic stock exchanges.

Highsun Group will team with Chinese investment firm Hesi Capital to launch the vehicle, with Hesi intending to manage the fund as the GP. The two groups will anchor the vehicle with a commitment of no less than RMB 150 million.

China’s booming internet sector has attracted many private equity investors, with a number benefiting from the Alibaba Group, China’s e-commerce giant, IPO earlier this year. The firm listed in New York in September, which was welcome news for its numerous private equity investors.

China Investment Corporation, Boyu Capital and CITIC Capital, as well as CDB Capital, the equity investment arm of China Development Bank, Silver Lake Partners, General Atlantic, Temasek and the Canada Pension Plan Investment Board (CPPIB) were among the firms that benefited from the IPO, Private Equity International reported earlier. 

Tellingly, venture capital deals in China are also on the rise.

Venture capital firms in China invested 144 percent more in new opportunities in the first half of 2014 compared to the same period last year, according to data from Dow Jones VentureSource.

Investment into venture opportunities reached $5.1 billion during the first half of this year, a huge jump from the $2.09 billion invested in H1 2013. Similarly, the volume of deals has also risen, to 228 from 151, equating to a 51 percent increase.