Warburg hits $2bn hard-cap for China fund

The firm will invest capital from the fund alongside its latest global buyout fund – Warburg Pincus Private Equity XII.

Global private equity firm Warburg Pincus has closed a China-focused fund on $2 billion, the firm said on Thursday.

Warburg Pincus China is a sidecar vehicle to the firm’s latest buyout fund Warburg Pincus Private Equity XII, which raised $13.4 billion in 2015. The firm will invest 50 percent from each fund when transacting in China, giving a total war chest of $4 billion for the firm’s investments in the country.

Warburg Pincus China, which the firm launched in June, received investor interest in excess of its $2 billion hard cap after six months on the fundraising trail. According to a source with knowledge of the fundraising, the China fund was “significantly oversubscribed and the firm had to cut back investor allocations to meet its strict hard-cap”.

Limited partners in the fund include the Washington State Investment Board which invested $200 million, the New Jersey Division of Investment with its $100 million commitment, the State Teachers Retirement System of Ohio which invested $75 million, as well as the Minnesota State Board of Investment’s $50 million commitment, according to PEI data.

The firm has also received commitments from leading public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations and high-net-worth individuals, according to a statement.

Frank Wei, managing director and co-head of China, said: “We will continue to invest behind long-term secular trends such as consumption, urbanisation, mobile technology, healthcare, and the ongoing evolution of the financial sector. This new China fund provides us with additional capital to continue to back high-growth Chinese businesses.”

Warburg Pincus, which has $40 billion under management, will continue its sector-focused strategy investing across consumer, healthcare, real estate, energy and industrials, financial services, and technology, media and telecommunications.

The firm has invested over $7 billion across 90 investments in over two decades in China. Among its current investments are women and children’s hospital Amcare, specialty retailer China Kidswant, aesthetic hospital group Evercare, and trucking logistics company ANE Logistics.

Last month, the firm partnered with Nasdaq-listed Chinese data centre company 21Vianet Group to acquire wholesale data centres and built-to-suit data centre projects in China. It also teamed up with Vietnamese private equity firm VinaCapital to invest and develop hospitality projects across South-East Asia.