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Private Equity Fund of Funds Managers Investing in China

by Joe Childs

  • 12 Aug 2010
  • PE

Preqin’s Investor Intelligence database shows that one-quarter of fund of funds managers (including firms managing primary, secondary and hybrid vehicles) have previously invested in private equity funds targeting opportunities in China, while a similar proportion would consider such opportunities in future. More than 40% of fund of funds firms that are interested in private equity in China are based in the US, approximately 14% are based in Switzerland and 8% are located in Germany.

Seven active managers of private equity funds of funds are based in China. The Beijing Equity Investment Development Fund, a fund of funds set up by the Beijing Municipal Government, has backed Carlyle Group’s China-focused buyout fund, which is commencing investment activity after holding a first close recently. Suzhou Ventures Group, which was fully established following a restructuring of China-Singapore Suzhou Industrial Park Ventures Co. in 2007, invests in venture capital funds to support companies and economic development in the Suzhou Industrial Park and the Yangtze River Delta region.

Hong Kong is home to an additional four private equity fund of funds managers, including Asia Alternatives Management, which also has offices in Beijing and San Francisco. Through several vehicles, including a 2007 mandate totalling USD 100 million from New Jersey State Investment Council, Asia Alternatives Management has invested in private equity funds targeting China and Greater China, as well as the broader Asia region. Another Hong Kong firm, Emerald Hill Capital Partners, closed its second fund of funds last month after securing commitments of USD 300 million. It focuses on funds investing across Asia and is known to have invested with managers based in China and India.

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