DCP Capital, a private equity (PE) firm that has backed some of China’s biggest companies, including Ping An Insurance and Mengniu Dairy, has reportedly held the first closing of its second China fund at $2.5 billion.
With a total fundraising target of $3 billion, DCP Capital Partners II reached the first closing with capital commitments from both existing and new limited partners (LPs). The new fund has already completed five investments so far, online media outlet AVCJ reported earlier this week.
DCP declined to comment on its fundraising update in an email reply to DealStreetAsia. Before the development, DealStreetAsia reported that 54 investors had committed a total of $2.16 billion as of October 2021, just one year after the launch of the new fund, according to a filing with the US Securities and Exchange Commission (SEC).
DCP is on the path to raising its biggest China fund. The predecessor fund, DCP Capital Partners I, was closed in April 2019 alongside the completion of other Chinese yuan funds. In total, DCP raised an equivalent of $2.5 billion from LPs including sovereign wealth funds, pension funds, funds of funds (FOFs), endowments and family offices.
While the investment mandate of Fund II was not disclosed, the predecessor fund focuses on sectors benefitting from domestic consumption upgrades and industry consolidation in Greater China, including consumption, industrial technology, healthcare, agriculture/food safety, business services, financial services and TMT.
The pan-Asia PE company was jointly set up by David Liu, a former partner at KKR & Co, where he led the US firm’s PE efforts in Greater China and Asia. The other co-founder Julian Wolhardt was also an ex-partner at KKR and served as its regional leader of China. Prior to KKR, Liu and Wolhardt led Morgan Stanley’s PE business in Asia and China. DCP’s investment strategy covers both traditional buyout deals as well as significant minority opportunities.
Having started investing in Greater China in 1993, the DCP management team has built a portfolio including China’s largest insurer Ping An Insurance and dairy products producer Mengniu Dairy. Its investee companies also include home appliances maker Haier Electronics, footwear retailer Belle International and China International Capital Corporation (CICC), which is the first joint venture investment bank in China.
Earlier this year, DCP led a Series C round in Chinese yogurt brand Simple Love, approximately one year after it had participated in the Guangzhou-based company’s 800-million-yuan ($119.7 million) Series B round. Xingsheng Youxuan, a DCP-backed community grocery shopping app, reportedly secured $2 billion at a pre-money valuation of $6 billion from FountainVest Partners, Primavera Capital Group and KKR, according to a Reuters report in February 2021.