Private Equity News & Analysis

Tsing Capital reaches RMB350m mark for debut RMB fund

The Yiyun Clean Technology Fund aims to raise up to RMB500m to invest in China’s clean technology sectors.

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Beijing-based Tsing Capital has raised RMB350 million ($51 million; €34 million) for the initial close its debut RMB fund, the Yiyun Clean Technology Fund, which is targeting RMB500 million.

The Chinese venture firm has garnered commitments from domestic investors including Beijing Zhongguancun Venture Investment Development Center, which is backed by the Zhongguancun Municipal Government, Xuzhou Economic Development Zone Company and Zhejiang China Merchandising Group Company. 

The China-focused fund will invest in sectors such as renewable energy, energy efficiency, environmental protection, new materials, sustainable transportation, smart grids, sustainable agriculture and emissions reduction.

China’s rising demand for clean technology, governmental efforts to promote investment in the sector and domestic companies’ preference for capital in the local currency were the reasons behind setting up the RMB fund, according to a Tsing Capital spokesman.

While Tsing Capital also manages China-focused clean technology funds denominated in US dollars, there will be no conflict of interest in terms of deal sourcing as “there are two separate teams each dedicated to managing the RMB fund and the US-dollar funds respectively”, the spokesman said. The firm has 20 investment professionals, he added.

Presently, Tsing Capital is investing China Environmental Fund (CEF) III, which closed on $228 million in late 2008. CEF III has deployed about $130 million in 10 investments including geothermal technology company Nobao New Energy; LED maker Neo-Neon; electricity storage systems developer Net Power; photovoltaic products maker ET Solar; and hydropower plant operator China Hydroelectric Corporation

CEF III is more than seven times as big as its predecessor fund, which closed on $30 million in 2005. CEF I raised $13 million in 2002. 

Tsing Capital is the venture capital arm of Tsinghua Holdings, a holding company wholly owned by China’s Tsinghua University. It typically invests between $3 million and $35 million in China’s clean technology sectors. The firm has $300 million under management.