February 25, 2020 / 1:05 AM / a month ago

China's CMC Capital raises over $950 million in its biggest private equity fund

BEIJING/HONG KONG (Reuters) - Chinese private equity fund CMC Capital Group said it raised over $950 million in its biggest private equity fund to date, bolstering its ability to cut deals in the world’s second-largest economy.

CMC Capital Partners III, the firm’s third dollar-denominated fund, surpassed its original target size after securing commitments from global investors, the firm said in a statement on Tuesday. It initially targeted about $800 million, said a media representative of the fund.

Its investors, known as limited partners (LPs), included pension funds, sovereign wealth funds, insurers, endowments and family offices across North America, Europe, the Middle East, and Asia Pacific, it added, without naming any of them.

Like the previous dollar funds, the latest fund will continue to invest in innovative growth companies with a China angle across sectors, including media and entertainment, technology and consumer, it added.

The move comes as a batch of new companies are looking into the changing habits and tastes of China’s younger internet-loving generation, who are more willing to spend money.

Chen Yulu, deputy governor of China’s central bank, said in a recent article in the Financial Times that he expected the consumption and investment activities to experience “a compensatory recovery” as the current coronavirus epidemic is gradually brought under control.

The virus outbreak, which has claimed 2,592 lives as of Sunday, has upended global supply chains and caused widespread disruption to businesses and factory activity in China.

CMC Capital follows several China-focused private equity and venture capital managers who raised $31.7 billion in dollar-denominated funds since 2019, according to data provider Preqin.

Other players, such as Centurium Capital and CICC, are targeting to raise $2.5 billion for a second dollar fund and $1 billion for a healthcare fund, along with British drugmaker AstraZeneca, respectively, according to Preqin.

Founded in 2010 by Li Ruigang, a Chinese media mogul, CMC Capital now manages over $2.5 billion across three dollar funds and two yuan-denominated funds, according to its statement. Its last dollar fund - CMC Capital Partners II raised $600 million in 2016.

The firm has invested in more than 50 companies including cinematic technology provider IMAX China (1970.HK), video platforms of Bilibili (BILI.O) and Kuaishou, and Perfect Dairy, a hot-selling cosmetics brand.

Reporting by Zhang Yan in Beijing and Julie Zhu in Hong Kong, editing by Louise Heavens

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