Chinese PE firm Boyu closes largest fund yet with US$3.6b: sources

[HONG KONG] Chinese private-equity (PE) firm Boyu Capital, known for cutting lucrative deals at home, has closed its latest US dollar-denominated fund with US$3.6 billion in committed capital, people with direct knowledge of the matter said.

The fund, Boyu's fourth and largest to date, has received strong backing from its existing investors, including family offices, sovereign funds and pension funds, the people said, declining to be named as the information is confidential.

Reuters reported in November that the Hong Kong-based Boyu was raising a new dollar fund targeting at least US$3 billion, the latest among a slew of global and regional investment firms that have raised record-sized capital for a region seeing a surge in deal-making.

Boyu's success in this round underscores investor confidence in the firm's ability to land lucrative deals in China's fast-growing new-economy sectors despite a slowdown in the nation's growth and Sino-US trade tensions, the people said.

China-focused PE and venture capital managers raised a combined US$49 billion last year, sharply down from US$128 billion in 2017, according to data provider Preqin. But Asia-focused dry powder still stood at a record high of US$291 billion by end-2018.

Boyu's investors include Hong Kong's richest man Li Ka-shing and Singapore state investors Temasek and GIC, one of the people added.

The New York Common Retirement Fund is a limited partner in Boyu's latest fund, committing US$40 million, the New York state comptroller disclosed on his website.

Boyu declined to comment.

INVESTMENTS

Founded in 2010, Boyu counts former TPG Capital senior executive Mary Ma and Alvin Jiang, the grandson of former Chinese president Jiang Zemin, as partners.

It is known for its 2012 investment in e-commerce giant Alibaba and other profitable deals such as its 2011 purchase of a controlling stake in Sunrise Duty Free, a retailer with outlets at Beijing and Shanghai airports.

In the past few years, Boyu has been actively investing in China's booming tech startups, including ride-hailing giant Didi Chuxing, on-demand services provider Meituan Dianping and Alibaba's financial affiliate Ant Financial, separate people with knowledge of the matter have said.

Recently, it led a 1.8 billion yuan (S$364.4 million) Series D round in Shanghai Yimi Dida Supply Chain Management Co, which crowd-sources delivery services in small counties and villages, according to Refinitiv data.

It was also among four cornerstone investors in the Hong Kong IPO of Chinese biotech firm CStone Pharmaceuticals last month, pledging US$20 million.

Boyu's last US dollar PE fund, which raised about US$2.1 billion in 2016, saw a 37.5 per cent gross internal rate of return (IRR) as of end-June, Reuters has reported.

REUTERS