As renminbi-denominated private-equity funds gain in popularity, so ever-larger amounts of capital is being raised and non-Chinese managers are increasingly forming onshore RMB funds, says law firm O’Melveny & Myers.
The Rmb9 billion onshore vehicle closed in January by Citic Private Equity is the biggest RMB fund so far, but some firms have even larger funds in the works. These funds will also have offshore and onshore and components.
Many of the deals O’Melveny works on are stand-alone RMB funds or parallel funds that work together with an offshore fund in the
Setting up an offshore fund is a relatively simple process compared to establishing an onshore one, he says. However, fund managers see it as a competitive advantage to have an onshore RMB fund, adds Sussman, and a growing wave of foreign managers are looking to raise all the renminbi for such funds from Chinese LPs.
Firms known to be preparing to close pure onshore multi-billion-dollar RMB funds with no offshore component include Blackstone Group, Carlyle Group, CLSA Asia-Pacific Markets, First Eastern Financial Investment Group, Kohlberg Kravis Roberts and TPG.
O’Melveny has also been working on venture-capital (VC) funds for what it says are the usual VC names – either offshore pockets or dual-pocket vehicles. These tend to be smaller deals, reflecting the smaller amounts of capital for those types of deal. It is working on one that will close in the coming weeks at around $100 million, a “reasonable” amount for the VC space, says Sussman.
He declined to reveal any specific names, but well known VC players include CNEI, DCM, DFJ, DT Capital Partners, Gobi Partners,
O’Melveny has also been active in South and
Most of O’Melveny’s competition has focused their Asian investment funds teams around
Meanwhile, the law firm recently strengthened its 12-strong investment funds practice in
Before joining O’Melveny, Zhang practiced law at a prominent international law firm in