Jeneration Capital Management, the Hong Kong-headquartered private equity firm focused on technology and growth investments in Asia, is expecting a final close of around $800 million to $1 billion on its second fund by the first half of next year, Private Equity International has learned.
The firm began fundraising for Fund II in the second quarter of this year with a target of $800 million. A hard-cap had not been set but the firm believes around $800 million to $1 billion is an ideal size to support its strategy of focusing on privately-held growth investments, a source familiar with the matter told PEI. The firm is expecting a “substantial first close” before year-end.
For Fund II, the firm is targeting a more institutional LP base, prompted by a strong demand for China growth-stage tech investments from US, Middle Eastern and Asian investors, the source added.
Investments in early growth-stage companies typically generate between 25 percent and 30 percent internal rate of return over a four to five-year holding period.
China internet and tech sectors were the most popular for investors based on the latest Bain & Company Greater China Private Equity Report 2018, accounting for more than 50 percent of overall deal volume in 2017.
Fund I is a permanent capital vehicle launched in the second half of 2015 that counts Asian entrepreneurs including technology and real estate executives among its LPs. It is unclear how much was raised for Fund I.
The firm characterises its strategy as “collaborative capital” or providing its portfolio companies with both long-term investment capital and business and strategic advice via its network of LPs.
Capital raised from the firm’s existing LPs has been deployed across investments focused on domestic consumption and innovation in Asia. These include investments in the Chinese online services platform Meituan Dianping, South-East Asian ride hailing giant Grab and Chinese used car sales company Uxin. The firm typically invests between $50 million and $100 million per deal.
Jeneration Capital was founded in 2015 by venture capital veteran Jimmy Chang, a former director at Silver Lake Partners and prior to that the executive director for technology investment banking at Morgan Stanley. Tony Zhang and Jason Tan joined the firm as partners in September 2017 and May 2018, respectively. Zhang was partner and head of Asia for New York-based hedge fund Coatue Management and previously a principal at Menlo Park venture firm DCM Ventures. Tan was a global partner at Tiger Global Management, a technology and consumer-focused global investment management firm based in New York.
Th firm manages about $2 billion in assets and has offices in Hong Kong and Beijing.
Jeneration Capital declined to comment on fundraising.