Fundraising

SAIF Partners closes fund 2 on $643m

The Hong Kong-based venture capital firm that spun out of Softbank has beaten an original $400m target to raise $643m, luring a raft of new international investors.

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SAIF Partners, a Hong Kong-based venture capital firm with a focus on Greater China, has raised $643 million (€518 million). The firm, which sent out private placement memoranda in November last year, had originally set out to equal the $400 million it raised for its debut fund in 2001.

The latest fund is the first raised by the firm as an independent entity. Formerly known as Softbank Asia Infrastructure Capital, it was managed by Softbank Asia and had only one limited partner in the form of Cisco Systems, which contributed the entire fund capital for the first fund of $400 million.

This time around, the firm – which did not use a placement agent – attracted a raft of international investors including Princeton University, JP Morgan, the Rockefeller endowment, LGT Capital Partners and Horsley Bridge Partners. Cisco Systems remains the largest shareholder, but now accounts for a minority of total commitments. Softbank still has a small stake in the general partnership, which is now majority owned by the firm’s partners.

Our Fund 1 portfolio is very young, with most investments not having been made until 2003 or 2004, but we have achieved some compelling returns already

Brandon Lin, partner, SAIF Partners

Explaining the fund’s attractions, SAIF partner Brandon Lin says: “Our Fund 1 portfolio is very young, with most investments not having been made until 2003 or 2004, but we have achieved some compelling returns already.” Notably, the firm invested $40 million in Shanghai-based online gaming company Shanda Interactive in March 2003. The firm was listed on Nasdaq last year, delivering SAIF a return of 14 times capital invested.

Lin says the firm has 30 portfolio companies in its first fund, which has around $80 million left to invest. Seven investments have already been made from the second fund, which targets investments averaging around $20 million each in expansion capital and pre-IPO opportunities in the media, consumer and telecom sectors.

He adds that around 70 percent of investments will be made in Greater China, 15 percent in Korea and another 15 percent in India. Based in Hong Kong, SAIF also has offices in Beijing, Shanghai, Bangalore and Seoul. The firm’s 14-strong team of investment professionals is headed by managing partner Andy Yan, a former principal adviser to AIG Asian Infrastructure Funds and director for strategic planning and business development at the World Bank.