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TPG reaches RMB4bn first close after 18 months

The global private equity firm's two RMB funds have made a first close with 90 percent of capital commitments from private investors, almost 18 months after launching.

TPG revealed today that its two RMB funds launched in August 2010 have made a first close on RMB4 billion (€484 million; $634 million), which makes up an aggregate 40 percent of their RMB10 billion combined target. 

No one at TPG was available for further comment before press time.

The two funds, located in Shanghai and Chongqing, garnered 90 percent of commitments from private investors, according to a company statement. The firm had hoped that ultimately at least 50 percent would be private capital.

The Chongqing fund aims to make on-shore investments to expand Chinese companies to and from Western China, while the Shanghai-based fund would invest in mid- to large-sized Chinese firms with a focus on the financial services, consumer, retail and healthcare sectors, according to a previous Reuters report.

“The successful first closing of the TPG RMB funds marks another milestone in TPG’s development in China,” said TPG partner and Greater China co-chairman Sing Wang, in the statement. 

During fundraising, TPG took a “consultative approach” by discussing its plans with institutional LPs, high net worth individual LPs and private entrepreneurs, Wang said.

To set up the RMB fund, TPG worked closely with various levels of government 
“to understand the regulatory intricacies”.

“Private equity is an emerging industry in China where policies and regulations are still evolving,“ he said.

TPG has been at the forefront of China’s private equity story, being one of the five foreign firms first approved for the Shanghai government’s QFLP programme. 

The firm was also recently one of three that signed “strategic partnership agreements” with the China Development Bank, which would supply them with advantageous access to opportunities in the country. Other firms were private equity giants Permira and Kohlberg Kravis Roberts.