US-based Sequoia Capital has launched separate Asia-focused funds for China and India, according to recent filings with the US Securities and Exchange Commission.
The target amounts of the two funds were not specified, but each vehicle is said to be raising between $500 million and $600 million, according to a report in Fortune.
Sequoia will be raising capital as investor sentiment for China and India wanes. Venture capital fundraising for China plunged 50 percent last year to $1.97 billion, according to data from DJX Venture Source, and reported earlier in PEI. Fourth quarter 2013 venture fundraising was down 83 percent year on year.
The figures reflect the difficulty firms have in divesting through IPOs, which is the main route for venture capital exits in China.
The 15-month freeze on new listings in China (which was lifted last month) combined with a lacklustre IPO market in Hong Kong has stopped many firms from exiting Chinese businesses over the last two years.
Returns have been weak in both markets. In India, for example, 10-year IRR as of Q2 2013 is 5.8 percent versus the global emerging markets IRR of 12.4 percent, according to Cambridge Associates data.
However, Sequoia raised an early stage investment fund for China last year, China Venture Fund IV, closing on $391.4 million, PEI reported earlier. The firm has also raised four India funds since 2004, the largest a $725 million vehicle with a 2008 vintage, according to PEI's Research & Analytics division..