Chinese asset management firm DCL Investments on Friday announced the completion of a new distressed asset investment fund at nearly 4 billion yuan ($578.5 million).
Limited partners (LPs) of the fund include insurance companies, China’s state-owned investment platforms, brokerage firms, trust funds, and university endowments, DCL said in a statement. The firm said that the fund has retained a strong re-up ratio, although it did not specify the exact rate.
The fund will leverage DCL’s expertise in distressed asset investments, operations, and disposals with a focus on infrastructures across areas such as industrial real estate, shipping, logistics, and new energy in major Chinese cities and regions, said the firm.
The fund looks to capture opportunities in “acquiring core assets at a discount amid increased special situations due to liquidity crises and operation inefficiencies,” it said.
Founded in 2015, DCL specialises in non-performing loans (NPLs), distressed real assets, and distressed corporate restructuring, among other strategies. As one of the earliest private equity (PE) entrants in China’s distressed investments, the Beijing-headquartered firm manages a total of over 10 billion yuan ($1.4 billion) in committed capital across both RMB and USD-denominated funds.
DCL expects the following few years to present “a good window” for distressed investments in China.
“Resilience in a post-pandemic domestic economy and the recovery of market confidence will provide strong support to the prices of core assets,” said the firm. “Meanwhile, new distressed opportunities will continue to emerge due to the existence of both internal and external uncertainties. And the upgrade and transformation of China’s economic growth drivers also have a long way to go.”
Its latest RMB fundraising success came after the firm set up its maiden US dollar fund to attract both domestic and international LPs to invest in distressed opportunities in the world’s second-largest economy. DCL’s executives told DealStreetAsia in an interview in July 2021 that it started preparing for the first USD fund in 2019 and held its first close in 2020.
The firm currently operates from five offices in mainland China, including Beijing, Shanghai, Ningbo, Hangzhou, and Nanjing. It is in preparation for setting up a new office in Hong Kong, according to its official website.