Warburg Pincus-backed Shanghai-based real asset platform DNE Group is understood to be planning for the launch of its second life science fund in China, PERE has learned.
With a fundraising target of $750 million in equity, the firm’s second USD-denominated life science fund will have a similar strategy to its predecessor, targeting both acquisitions and developments of life science projects in China. But unlike the first fund, which had only one investor, the new vehicle will seek capital from multiple institutions. The firm is currently working with capital advisor PJT Park Hill on the launch.
PERE reported exclusively last year that the group launched its first China-focused life science fund with an Asian institutional investor. With a gross asset value of $1.2 billion, the fund was seeded with a life science park located in Shanghai’s life science cluster, Shanghai Zhangjiang Science City. Valued at $600 million, the asset was previously owned and operated by solely by DNE. The firm declined to comment on the new fund.
Sun Dongping, founder and chief executive officer at DNE Group, told PERE in a separate interview that despite the “unprecedented volatility” in the market as a whole, there was “strong resilience and opportunities for growth” in so-called new economy sectors such as logistics, life science and industrial. Last year, the firm raised $2.6 billion in new equity to invest in these sectors.
On life science specifically, China’s health sector had historically concentrated on primary and acute services, Sun said in a different interview with PERE. “While other offerings such as rehabilitation and research and development have lagged developed nations, these segments have seen significant investment and development over the past 10 years,” he said. “This provides a serious opportunity for investors exploring this space.”
Apart from DNE Group, ESR and Asia’s largest healthcare-dedicated investment firm CBC Group are among the international players looking to tap the Chinese life science real estate market, even as some North American and European investors have grown more cautious about investing in the country. ESR made its first investment in the sector with the acquisition of a life sciences R&D business park for 268 million yuan ($40 million; €39 million) in Shanghai last August, while CBC is on track to reach a final close with CBC China Life Science Infrastructure Venture this year.