For its first dedicated China fund, American private equity giant Warburg Pincus decided to go big.
New York-headquartered private equity firm Warburg Pincus says it has raised a $2 billion fund to invest in China across sectors such as consumer goods and services, finance, healthcare, real estate, and energy as well as technology, media and telecommunications.
The $2 billion Warburg Pincus China will be a companion fund to Warburg Pincus Private Equity XII, a $13.4 billion global private equity fund that was closed in late 2015.
The fund was reportedly oversubscribed and closed just six months after it the market. Its investors were a mixed group of old and new Warburg patrons, and included public pension funds such as the Ohio State Teachers Retirement System, the Minnesota State Board of Investment, and the New Jersey Division of Investment. Several private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, and high-net-worth individuals joined in on the fun as well.
Despite having just raised its first full-time China fund, the firm is absolutely no stranger to the Chinese private equity market. Warburg made its first investment in China back in 1994, and as its co-CEOs point out, it has since invested over $7 billion in 90 companies.
In fact, Warburg has been seen as an aggressive player in the nation’s real estate private equity scene. It has snapped up stakes in several commercial real estate companies such as China Jinmao Holdings, and has even co-founded a buyout firm which converts properties into rental apartments and office spaces.
It’s absolutely no slouch outside of real estate, too; some of Warburg’s current Chinese investments include names such as Amcare, ANE Logistics, China Huarong Asset Management, and ZTO Express.
Speaking on the new fund’s potential, Frank Wei, Warburg’s Co-Head of China, had this to say (PDF):
“We attribute our persistent record to identifying growth themes and partnering with talented management teams. We will continue to invest behind long-term secular trends such as consumption, urbanization, mobile technology, healthcare, and the ongoing evolution of the financial sector. This new China fund provides us with additional capital to continue to back high-growth Chinese businesses.”
Photo: David Almeida