Hony receives RMB3bn from NSSF

The China-focused mid-market private equity firm secured the commitment to its second RMB-denominated fund, which is reportedly targeting RMB10bn.

China’s National Social Security Fund (NSSF) has agreed to commit RMB3 billion (€324.8 million; $450.2 million) to Hony Capital’s second RMB-denominated fund, a source confirmed to PEI Asia.

The fund is reportedly targeting RMB10 billion, according to Chinese news website 21st Century Business Herald. No further information on the fund was available.

Neither Hony nor NSSF could be reached by press time.

In addition, NSSF will commit another RMB300 million to Legend Capital, the venture capital subsidiary of Hony’s parent Legend Holdings, the source added.

This is the second commitment Hony has secured from NSSF. In 2008, Hony raised RMB5 billion for its maiden RMB fund, to which NSSF committed RMB2 billion.

The RMB3 billion commitment comes after IDG Capital Partners confirmed in July the receipt of RMB1.2 billion from NSSF. IDG’s Harmony Growth Fund, which is reportedly targeting RMB3.5 billion, had also received an RMB1 billion commitment from China Science and Merchants Capital Management, which is affiliated to the Chinese Academy of Science.

Established in 2000 and administered by the National Council for Social Security Fund, NSSF had more than $100 billion in assets under management as of August and is able to allocate 10 percent to private equity, according to sister data provider Private Equity Connect.

In addition to Hony and IDG, NSSF has committed RMB2 billion each to CDH Investments and CITIC Mianyang Private Equity Fund, RMB1 billion to the Bohai Industry Investment Fund, and has also reportedly invested in funds managed by the Shenzhen Capital Group.

Established in 2003 as a captive private equity platform for government-backed Legend Holdings, Beijing-based Hony currently manages more than $3 billion across four USD funds and one RMB fund.

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.