Ex-KKR ex-combatants in Asia raise $ 2.5 billion to fund first funds for China

HONG KONG (Reuters) – DCP Capital, co-founded by former KKR & Co Greater China chairman David Liu, said it raised about US $ 2.5 billion in its first funds in US dollars and yuan, giving investors to the private equity company sufficient resources firepower to invest in Greater China.

These funds provide a significant cash pool for Chinese investment and underscore investor confidence in their ability to enter into the world's second-largest economy, in the face of the economic slowdown and trade tensions with the United States.

In a statement, DCP said Tuesday it raised more than $ 2 billion for DCP Capital Partner I dollars from investors, called sponsors. The fund has been "largely" oversubscribed because of strong demand from investors such as pension funds, funds of funds and sovereign wealth funds, he added.

Concurrently with a fund raised simultaneously, the committed capital has reached approximately $ 2.5 billion, which has allowed DCP to be among several investment managers focused on China and with funds in US and Chinese currencies.

China-focused private equity and venture capital managers raised $ 37 billion of funds in dollars last year, up from $ 40 billion in 2017, according to data provider Preqin. The dry powder targeted in Asia – funds committed but not yet invested – represented a record $ 291 billion by the end of 2018.

Among the investors in DCP are the Singapore sovereign wealth fund GIC Pte Ltd and the state investor Temasek Holdings Pte Ltd, as well as the Canadian public pension fund Caisse de dépôt et placement du Québec (CDPQ), said a person with direct knowledge of the question.

DCP declined to comment on the investors.

The Beijing-based private equity firm said it would mainly seek to buy back and have significant minority investment opportunities in sectors benefiting from the modernization of consumption and consolidation of the economy. Industry in Greater China, such as consumption, industrial technology and health care.

DCP was established in 2017 by Liu, who was also co-director of KKR's private equity business in Asia, and by Julian Wolhardt, former KKR senior executive in the region, after having worked for 11 years with the KKR US buyout company. Prior to joining KKR, Liu and Wolhardt led Morgan Stanley's private equity activities in Asia.

The two companies had led investments for KKR, including China Modern Dairy Holdings Ltd. raw milk producer, Haier Electronics Group Co Ltd, and Far East Horizon Ltd. leasing company.