China’s Key Broad Capital is setting up an RMB-denominated 2-billion-yuan ($282.1 million) private equity (PE) fund to focus on the new energy and energy storage industries.

Earlier this month, Key Broad Capital signed agreements to rope in two domestic companies as the fund’s limited partners (LPs), including Hong Kong-listed battery products maker CALB Group, and Hunan Corun New Energy, a Shanghai-listed provider of energy-saving solutions and core components used in new energy vehicles (NEVs), said the firm in a post on its official WeChat account.  

The PE fund – Key Broad (Shenzhen) Advanced Energy Storage Innovative Industry Private Equity Investment Fund (in Chinese) – reached a first close at 402 million yuan ($56.7 million) with capital commitments from the two anchor LPs. 

Key Broad Capital and Shenzhen-based Yuanke Huichu Investment serve as the co-general partners (GPs) of the fund.

Through the PE fund, Key Broad Capital plans to source deals across the new energy and energy storage supply chain and leverage the dry powder to speed up the development of its portfolio companies. The fund will allow it to “cash in on rising industry opportunities amid the world’s energy transition,” the firm said in the post.

Key Broad Capital, founded in September 2021 and registered in China’s southernmost island province of Hainan, specialises in private market fund management with almost 10.4 million yuan ($1.5 million) in total assets as of September 30, 2023, according to its unaudited financials filed with the Asset Management Association of China (AMAC). CALB Group holds a 30% stake in the firm. 

It recently invested in a renewable energy firm affiliated with Shanghai-listed Nuode New Materials, which develops copper materials for lithium-ion battery production. It did not disclose the financial details of the deal.

In December 2023, the firm led a Series A round of “a few hundred million RMB” in Fujian Xiangxin New Energy Auto Parts, a subsidiary of Shenzhen-listed NEV components manufacturer Lucky Harvest. CMB International Capital, SDIC Unity Capital, and GAC Capital, the equity investment arm of China’s state-owned automaker Guangzhou Automobile Group, participated in the deal.