March 6, 2020 / 4:34 AM / in a month

China's Centurium Capital to reach first close at $2 billion: sources

NEW YOKR/HONG KONG (Reuters) - China’s Centurium Capital, a big backer of domestic startup Luckin Coffee (LK.O), is set to reach the first close of fundraising for its latest private equity fund with about $2 billion, said two people with direct knowledge of the matter.

The private equity firm plans to close the first stage of fundraising for Centurium Capital Partners Fund II by the end of March, the people said, bulking up in the world’s second-largest economy, which has become a key market for PE funds.

Beijing-based Centurium, co-founded by the former head of Warburg Pincus Asia Pacific David Li, kicked off the fundraising for its second dollar-denominated fund in December. It has attracted commitments from several existing and new investors, known as limited partners (LPs), the people said.

Among the existing partners are Singapore’s GIC Pte Ltd [GIC.UL] and Temasek Holdings [TEM.UL], and U.S. pension fund Washington State Investment Board, one of the people said.

Centurium, Temasek and Washington State Investment Board declined to comment. GIC did not respond to a request for comment.

The fundraising comes as a coronavirus epidemic in China has cast a shadow over the global economy and forced scores of flights to be cancelled. But that has not slowed Centurium’s fundraising pace, said the people, who declined to be named as they were not authorised to speak to media.

“COVID-19 at the moment is more like a speed bump rather than a major issue, as so many LPs are recent investors or did on-site (due diligence) late last year before COVID-19 went big in China in January,” said the other person.

Some of Centurium’s investors have since followed up with the firm via video and telephone conference calls, added the first person.

Centurium plans to reach the final close in the next 12 months and will likely beat the $2.5 billion fundraising target, said the person.

Launched in March 2018, Centurium in July last year raised over $2 billion for its debut fund and has deployed more than 80% of the capital raised in the fund.

Its most high-profile portfolio firm is Luckin Coffee, the Chinese challenger to Starbucks Corp (SBUX.O). It invested about $180 million in Luckin during the startup’s first two fundraising rounds.

In January, Centurium fetched $232 million by selling about 20% of its holdings in Luckin via a share placement and still remains the largest intuitional shareholder in the company after the deal.

Besides Luckin, it also led a consortium in September last year to take private Nasdaq-listed China Biologic Products, a biopharmaceutical firm which makes and sells plasma products, in a $4.6 billion deal.

Reporting by Chibuike Oguh in New York and Julie Zhu in Hong Kong. Editing by Gerry Doyle

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