HK's Welkin collects $100m for second fund – Exclusive

The mid-market firm also recently invested in a tea seed oil company headquartered in mainland China.

Welkin Capital Management has gathered more than half of its target for its second fund, Private Equity International has learned.

The growth equity investor has raised $100 million so far against a $150 million target for Welkin Capital Partners II, according to a source familiar with the fundraising. Welkin began fundraising in 2015 and a held a first close on $59.5 million in October, according to a filing with the US Securities and Exchange Commission.

It is understood the firm itself is the single largest investor in Welkin II, and the remaining capital was raised from family offices in China and Europe.

Welkin II focuses on growth equity opportunities in consumer goods, manufacturing, business services, and natural resources sectors in China.

Its predecessor fund, whose capital was raised from Welkin’s four founding families, pursued a deal-by-deal model and has been fully deployed, the source added.

In late February firm invested 120 million yuan ($17 million; €16 million) in a 15 percent stake in Hunan Guitaitai Camellia Oil Technology via a share subscription on China’s National Equities Exchange and Quotations exchange.

Following the close of the deal, Jiang Pu, a principal at Welkin, will join Guitaitai’s board of directors.

The firm’s investment will be used to expand the company’s production capacity, distribution channels and marketing programmes. Pu said in a statement that Chinese consumers are increasingly focused on health and quality consumer products, and camellia oil, also known as tea seed oil, is well-positioned for high growth and is quickly becoming a mainstream edible oil category.

Founded in 2008, Guitaitai manufactures camellia oil products using the cold press method, which retains nutrients and flavour otherwise destroyed by heat in refined oil extraction. The company’s products are sold in more than 13,000 locations in China in retailers such as Suguo, Vanguard and Hypermart.

Welkin has at least $200 million in assets under management and was founded in 2009 by four family offices in China. The firm has backed companies including private airline company Juneyao Airlines, auto retailer Tuhu.cn and Vietnamese food service company Huy.

Welkin declined to comment. 

– Christie Ou contributed to this report.