Following news that Chinese private equity firm Hopu Investment was winding down in November last year, Richard Ong, one of its three co-founders, is reportedly raising his own fund targeting $2 billion.
In addition, Fang Fenglei, Hopu's most well-known co-founder, is in the process of setting up a new vehicle to take over the portfolio assets of Hopu’s $2.5 billion maiden fund, according to the same report in The Wall Street Journal.
Hopu declined to comment when approached.
According to the report, Ong’s fund targets a first close on $1.5 billion at the end of March and a final close in early June. The new venture, RRJ Capital, which will be based in Hong Kong and Singapore, has already signed up eight investors including Singapore’s sovereign wealth fund Temasek Holdings. Other investors are reportedly from Asia, the Middle East, Canada and the US.
The fund will focus on investment in the sectors of agriculture, food, natural resources, consumer, and financial services. While it has an Asian remit, the fund will be open to deals elsewhere if there is a strong link to regional interests, according to the WSJ report.
Founded in 2007 with the backing of Temasek and Goldman Sachs, Hopu's maiden deal was a $300 million co-investment alongside Temasek in Hong Kong Lung Ming Investment Holding, the operating company of a Mongolian ore mine.
Prior to establishing Hopu, Fang was head of Beijing-based Goldman Sachs Gao Hua Securities, Ong was Goldman Sachs's co-head of investment banking in China and Dominic Ho, the third co-founder, was a partner at KPMG.
Market chatter had it that Hopu’s winding down was in part due to infighting between the three founding partners. However, according to the report, the three will continue to work together as Fang is to chair RRJ Capital’s board of international advisors and Ho will also sit on the board.
Fang’s planned new vehicle meanwhile has yet to be named. It is expected to focus on a long-term investment growth strategy for Hopu’s portfolio companies that is “better suited to the Asian culture”, according to WSJ.
“[Fang]’s taking his time to reflect, reorganise and restructure before executing plans to carry on with his Hopu brand,” an unnamed source was quoted as saying in the report.