London Asia Capital, an AIM-listed Greater China-focused investment and merchant banking group, has launched a new fund focusing on growth capital investments in China.
The London Asia Chinese Private Equity Fund has a target of £50 million (€73 million; $88 million), and will seek a listing on AIM. The fund is sponsored and advised by Collins Stewart.
London Asia will manage the fund, with chief executive Simon Littlewood and group executive director for Greater China Victor Ng appointed to the fund’s board.
So far, London Asia Capital has made 20 investments totalling approximately £25 million.
Littlewood told PEO that the new fund would be raised through issuing 50 million shares at £1 each, which would then list on AIM. He added that London Asia Capital has already identified over £150 million of investments that meet its criteria from existing deal flow, sourced from its teams in seven offices across China.
“Although we’re quite a small company, we have a strong brand in China as we’ve been there for a period of time and built up a network of contacts and partners,” said Littlewood. “We get to see a whole host of deals – considerably more than we could ever do [without the network].”
Target sectors for the fund include energy and environment, financial services, TMT, education, pharmaceutical, chemicals and consumer products.
The fund’s investments will have a relatively short holding period, with exits expected 12 to 36 months after initial investment, mainly through trade sales or IPOs. Investment proceeds will be reinvested into the fund.
According to London Asia, the firm will receive an annual fixed fee of 2 percent of the fund’s net asset value, plus a performance-related fee based on the increase in net asset value each year.