Schroders Capital and Kasikornbank’s private banking business have launched a secondaries-focused China private equity fund to tap capital from private wealth investors in Thailand.
The fund, which is managed by Schroders Capital, is targeting high-growth companies in technology, consumer, and healthcare sectors that offer attractive discounts in China’s secondaries market to capture the dislocation opportunities, according to a company statement on Tuesday.
The strategy is co-developed by Schroders Capital and KBank Private Banking to provide Thai private wealth investors access to China’s RMB private equity market.
“The long-term fundamentals of the China private equity market remain highly appealing with attractive opportunities, especially in RMB secondaries. With limited players in the nascent China’s secondaries market, we are excited by this partnership with KBank Private Banking, where investors can tap into the fast-growing potential of China’s private equity,” said Jun Qian, Head of Private Equity China, Schroders Capital.
Schroders Capital, which has been investing in the world’s second-largest private equity market through the Qualified Foreign Limited Partnership programme since 2020, counts the vehicle as its sixth dedicated yuan-denominated fund under its portfolio. The fund has a shorter investment term than conventional private equity funds in the market.
“The trend in allocating to private markets is accelerating as investors are increasingly seeking out alternative sources of return,” said Lily Choh, Head of South Asia and CEO Singapore, Schroders.
China’s secondaries transaction volume jumped by 71% to 1,084 in 2020 and 70% to 1,840 in 2021, according to a report by BDA Partners. The decline of assets in the primary market in light of COVID-19 in 2020 pressured both general partners and limited partners to make returns by selling their fund shares in the market.