Danny Lee, who previously managed global private equity (PE) for the family office of Alibaba Group’s co-founder Joseph Tsai, is looking to raise about $200 million for his own fund targeting wealthy investors.
Lee started the Cayman-domiciled fund VCA Capital in 2022 after an over-seven-year tenure at Hong Kong-headquartered Blue Pool Capital, which Alibaba’s Tsai co-founded with Alexander West in 2004 to invest in public and private equities, hedge funds, and real estate.
Lee’s investment team, which currently has a total of three staff including himself, is based in Hong Kong, Bloomberg reported on Tuesday.
While Lee could not be immediately reached for comments, he shared the Bloomberg report on his LinkedIn page on Tuesday.
“We’re targeting to raise about $200 million in the next 12 to 24 months,” Lee, managing partner at VCA Capital, told Bloomberg. “I’m looking to build a team as we raise more capital.”
Lee said that he works with a range of investors across industries including technology, real estate, media, and finance to invest capital overseas.
The seasoned PE investor is building his own fund to target wealthy individuals looking to diversify their investments. This focus on portfolio diversification has been growing in the investment circle amid rising geopolitical tension.
Many Chinese investors from high-net-worth individuals (HNWIs) and family offices to investment funds and financial advisers are increasingly shifting sight to other markets, such as Southeast Asia to seize the upside potential of the region’s fast-rising startups at a time of market slowdown in China.
Likewise, Tsai’s family office has been investing in property in Portugal and New York. The founders of real estate developer Soho China reportedly shifted much of their fortunes out of the country amid the implosion of China’s property market.
“Chinese families are starting to learn; they’re learning to diversify,” said Lee. “That’s one of their biggest consdierations,” he said, adding that many are looking at the US, Europe, and Southeast Asia.
While he remains positive about investing in China’s PE market despite its current slower growth compared to decades ago, Lee said that he favours “boring” businesses that have good cash flow and margins. For VCA Capital, he is looking at companies that have pretax earnings of at least $10 million.
Lee left Blue Pool Capital in 2021 but remains as a senior adviser at the family office. He worked with Tsai at Investor AB, the main investment vehicle of Sweden’s Wallenberg family in the late 1990s.