Hony holds $1bn first close on second RMB fund

The Chinese private equity firm has raised its target to $1.05bn, which it expects to hit by the end of May 2011.

Beijing-based Hony Capital has held a first close on RMB7 billion (€774.8 million; $1.05 billion) for its second RMB-denominated fund, which has a hard-cap target of RMB10 billion.

According to Hony’s statement, the original target was set at RMB8 billion. However, as the firm had garnered RMB7 billion for its first close, it subsequently adjusted the target to RMB10 billion. The fund expects a final close by the end of May next year.

All LPs in the firm’s first RMB fund have come back onboard for the second fund, the spokeswoman added. Among them, China’s National Social Security Fund (NSSF) committed RMB3 billion, as was reported earlier by sister news site PEI Asia.

“We trust Hony Capital very much; we’ve had a very good relationship,” Dai Xianglong, chairman of NSSF, said in a statement from Hony.

In 2008, Hony raised RMB5 billion for its maiden RMB fund, to which NSSF committed RMB2 billion. That fund has now been fully deployed.

The fund will continue to focus on buyout and growth capital investments in the financial services, consumer, culture, media and architecture sectors, according to the statement.

Established in 2003 as a captive private equity platform for government-backed Legend Holdings, Hony currently manages more than $4.5 billion across four USD funds and two RMB funds.

Limited partners in its USD funds include Goldman Sachs, property developer Sun Hung Kai, Temasek, CalSTRS, Stanford and Notre Dame endowment funds, Rothschild, Pantheon Ventures, Partners Group, Squadron Capital, and Asia Alternatives.