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.
During the past several years, the US firm has been among the more aggressive major private equity firms in China’s real estate market, investing in operators and developers of budget hotels, warehouses, business parks and serviced apartments, among other market niches.
When suitable companies were not available to invest in Warburg Pincus on a number of occasions went so far as to create their own, co-founding a warehouse developer and a serviced apartment platform, among other ventures.
China Track Record Helps Warburg Raise $2 Bil in Six Months
The new fund, which was six months in the making, attracted investors from public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations and high-net-worth individuals, the company said in a statement.
“The response to the Warburg Pincus China reflects our established track record, our very talented team, and the significant opportunities we see for growth investing in the country,” said Charles R Kaye and Joseph P Landy, co-CEOs of Warburg Pincus.
In 2011 the fund manager co-founded e-Shang, a China-based warehouse developer with a pair of local entrepreneurs. Since that time, Warburg Pincus has gone on to set up a manufacturing and business park developer, as well as a serviced apartment platform with local partners on the mainland.
The US private equity giant began its first investment in China in 1994, having invested over $7 billion in 90 companies to date.
In addition to its real estate deals, Warburg Pincus’ notable recent partial and full exits include CAR Inc., China’s largest car rental company; 58.com, China’s leading lifestyle services platform; and China Biologic Products, a plasma-based biopharmaceutical company.
In addition to the purely China-based investments, together with favored mainland partner AVIC Trust, Warburg Pincus has been backing a $1.3 billion management-led buyout of Singapore’s ARA Asset Management.
China Fund Follows $1.5B Mainland Real Estate Fund
Earlier this month, D&J China, a business park developer backed by Warburg Pincus, launched a new China real estate fund with an initial capitalisation of RMB 10 billion ($1.45 billion).
The two and a half-year-old developer has established the D&J Zhiyan Equity Investment Fund in partnership with mainland financial institution AVIC Trust to invest in industrial infrastructure including business parks, R&D parks and production facilities.
The $1.45 billion fund, which will primarily target integrated industrial parks in first-tier and select tier-1.5 cities in China, is the latest in a series of investment tie-ups between Warburg Pincus and AVIC Trust. Both parties earlier joined hands in backing a management buyout of ARA Asset Management that could value the Singapore-based firm at $1.3 billion.