Chinese private equity (PE) firm FountainVest Partners is targeting to raise 3 billion yuan ($413.9 million) for its second RMB-denominated fund, the firm disclosed in a statement on Tuesday.
The new fund will add to FountainVest’s existing portfolio of four US dollar funds and one Chinese yuan fund. The fund will mainly invest in growth-stage opportunities in China across the industries of advanced manufacturing, healthcare, and consumption, among others.
Hong Kong-headquartered FountainVest set up the RMB Fund II in partnership with the local government of Xinchang County in eastern China’s Zhejiang Province.
The fund partnership came alongside the establishment of a 1.5-billion-yuan ($206.9 million) manufacturing base by FountainVest-backed Langdi Pharmaceutical in Xinchang. The manufacturing base is expected to start delivering 4 billion yuan ($551.8 million) worth of primarily calcium supplements per year in 2025.
FountainVest had acquired all shares of Langdi from its publicly-listed parent Shanxi Zhendong Pharmaceutical for 5.8 billion yuan ($800 million) in late October.
Its latest RMB fund comes about four years after the launch of FountainVest’s debut RMB fund in December 2018. The maiden Chinese yuan vehicle had a fund size of 1.7 billion yuan ($234.6 million) and a plan of backing approximately 15 companies, with its cheque size per deal ranging from 80 million yuan ($11 million) to 200 million yuan ($27.6 million).
FountainVest, which has invested in fitness club chain PURE Fitness and food delivery giant Meituan, is said to have held the final closing of its fourth US dollar fund just above target at $2.9 billion. Media outlet AVCJ reported in June, adding that FountainVest Capital Partners Fund IV had already deployed one-third of the corpus.
The firm’s first three USD funds raised almost $4.5 billion in total.
Asia-focused FountainVest manages assets for global public pensions, sovereign wealth funds, and other institutional investors with a mandate to source deals in areas including consumption, media, technology, healthcare, as well as industrial and corporate services.
FountainVest was said to be one of the final-round bidders alongside TPG and Warburg Pincus for Carlyle Group’s stake in AmbioPharm. It was also reportedly competing for EQT’s stake in specialty packaging company GPA Global with bidders including Ontario Teachers’ Pension Plan Board, one of Canada’s largest public-sector pension managers.
Its portfolio companies in China include display-advertising provider Focus Media, pharmacy chain LBX Pharmacy, fashion brand Peace Bird, Tencent-backed vehicle services platform Tuhu, and IMAX China, which designs and sells image maximum (IMAX) theatre systems in the country.