Blackstone collects half of RMB fund target

Blackstone Zhonghua Development Investment Fund, The Blackstone Group’s maiden RMB-denominated fund, has raised almost half of its RMB5 billion (€577 million; $738 million) target, a source close to the firm told PEI Asia.

The fund is expected to see a final close by September, the source added. Blackstone declined to comment. Shanghai Lujiazui could not be reached by press time.

Shanghai Lujiazui Finance and Trade Zone Development Corporation, a real estate and infrastructure developer, has committed RMB2 billion to the fund, according to reports in the Chinese financial press. In June, Chinese coal and clean energy resources company Shanghai Ace agreed to commit RMB300 million in the fund. 

Steve Schwarzman

Managed by Blackstone’s Chinese subsidiary, the Blackstone (China) Equity Investment Management Company, the fund will primarily invest in and around Shanghai. While the fund is sector-agnostic, it will reportedly focus on companies in the alternative energy, environmental and medical sectors.

The Blackstone (China) Equity Investment Management Company was set up in November last year under a pilot policy that allows foreign private equity and venture capital firms to establish wholly-owned Chinese entities in Shanghai’s Pudong New Area.

Earlier this month, Kohlberg Kravis Roberts set up a China-focused fund targeting around $1 billion -the first time KKR has launched a country-specific fund. 

In February, The Carlyle Group signed an agreement with local conglomerate Fosun Group to sponsor and manage a Shanghai-domiciled RMB-denominated private equity fund. A month earlier, it signed a memorandum of understanding with the Beijing Municipal Bureau of Financial Work to set up an RMB fund in Beijing as well. That fund is also reportedly targeting commitments of RMB5 billion.

A few other foreign firms raising RMB-denominated funds include Abax Global Capital, Infinity I-China, Prax Capital, First Eastern Investment Group and CLSA Asia-Pacific Markets.