Hudson reveals China partner for RMB fund

The hiring of Zhongmin Shen to lead the firm’s China effort was quickly followed up by the announcement of a partnership between Hudson and the Yangzhou Municipal Government Financial Affairs Office.

Hudson Clean Energy Partners has entered a partnership with the Yangzhou Municipal Government Financial Affairs Office to officially establish an RMB fund for China’s clean energy market.

The fund is expected to launch in the coming months, the firm said in a statement. The firm did not disclose fundraising targets, but did say the partners had agreed on terms to make this China’s largest clean energy RMB fund. That distinction is held by Nature Elements Capital I, which had its first close in April at RMB250 million (€27 million; $39 million), according to Private Equity Connect

The firm plans to market the firm primarily to Chinese institutional investors, Hudson founder and co-managing partner Neil Auerbach told Private Equity International.

Several private equity firms breaking ground in China have partnered with state or local agencies. Last year, Morgan Stanley signed a memorandum of understanding with the Hangzhou Municipal government to launch an RMB-denominated private equity fund. The Carlyle Group’s RMB3.2 billion (€349 million; $496 million) buyout fund is being managed by a partnership between Carlyle and the Beijing State-owned Capital Operation and Management Center (BSCOMC).

Earlier this week, Auerbach said Hudson’s recent expansion to China would include marketing its first RMB fund. Zhongmin Shen was hired to lead the effort and launch the firm’s Beijing office.

“China, over the last three to four years, has emerged as a leader in clean energy. Strategically, the question wasn’t whether we would go, but when,” Auerbauch said in an earlier interview.

Hudson, led by Auerbach and John Cavalier, was founded in 2007. The firm maintains offices in New Jersey and London. Hudson’s first clean energy fund closed at over $1 billion in 2009.