Chinese private equity firm Hony Capital has closed its eighth fund on $2.7 billion, exceeding its $2 billion target, according to a source with knowledge of the matter.
Hony Capital Fund VIII is a dual currency fund with a USD-denominated portion and a renminbi portion, which each targeted the equivalent of $1 billion. The fund reached a first close on $1 billion in October last year, as reported by Private Equity International.
The fund will have the same mandate as Hony’s previous buyout funds, providing growth capital to Chinese businesses in the construction, pharmaceuticals, consumer goods, retail, energy and financial services sectors. It will have a particular focus on Chinese state-owned enterprises (SOEs), as well as private firms in China, Hong Kong and Taiwan that are in financial distress.
The firm reached first close on its eighth vehicle in October on $1 billion, as reported by PEI. Alongside the fund, Hony also raised a $600 million vehicle to invest in transactions outside of China.
Fund VIII is slightly larger than its previous vehicle, Fund V, its fifth US-dollar denominated fund which collected $2.4 billion.
Limited partners in Hony’s funds include the Canadian Pension Plan Investment Board, California State Teachers’ Retirement System, Goldman Sachs, Temasek Holdings, Abu Dhabi Investment Authority, Partners Group, BBC Pension Trust, and its major backer Chinese conglomerate Legend Holdings Corporation, according to PEI Research & Analytics.
The firm has invested in 80 companies since 2003, of which 30 are Chinese SOEs. Among its big-ticket transactions, it acquired UK restaurant chain Pizza Express from pan-European firm Cinven, oil company Santos, US film studio STX Entertainment and Chinese video site PPTV.
In March, Hony sold its stake in Australian oil and gas company Santos to Chinese gas distributor ENN Group for $750 million after investing only months earlier.
Hony has over $7 billion of assets across eight private equity funds. Five of its existing funds are in US dollars and two are in Chinese yuan.