China-based private equity firm Hopu Investments has raised $1bn of a $2.5bn dollar-denominated fund from limited partners including diversified conglomerate Mitsui & Co, Reuters reported today
Singaporean state-owned investment firms Temasek and GIC have also contributed to the fund, as has central banking institution Hong Kong Monetary Authority and sovereign wealth fund China Investment Corp.
The fund will target investments in the domestic consumer sector and reformed state-owned enterprises (SOEs).
Hopu is thought to be targeting a final close of $2.5bn by early 2018, $2bn of which should be secured by the end of 2017. The vehicle would be its third dollar-denominated fund.
By holding dollars, the fund may lure foreign investors averse to local currency risks while also avoiding the tighter restrictions on outbound Chinese capital implemented by the government in August this year.
The firm’s portfolio includes consumer electronics producer Xiaomi, social media platform Mogujie and protein therapeutics developer Ambrx.
The number of conglomerates controlled by the Chinese central state has fallen from 117 in 2012 to 98, according to Reuters, and the government has advanced mixed ownership to open up a greater role for private-sector and foreign investors.
Other China-based private equity firms said to have launched dollar funds recently include Hony Capital, which raised a $2.7bn dual-currency fund in April 2016 to help reconcile the interests of Chinese and foreign dealmakers.
– The original version of this article appeared on our sister site, Global Government Venturing.