China's CITIC Capital raises $2.8 billion in its biggest private equity fund

FILE PHOTO - CITIC Capital Holdings Limited Chairman and CEO Yichen Zhang attends the Asian Financial Forum in Hong Kong, China January 15, 2018. REUTERS/Bobby Yip

HONG KONG (Reuters) - CITIC Capital, the flagship alternative investment arm of Chinese financial conglomerate CITIC Group [CITIC.UL], said it raised $2.8 billion in its fourth China buyout fund, bolstering its ability to cut deals in the world’s second-largest economy.

The CITIC Capital China Partners IV, the firm’s biggest private equity fund to date, received “strong” interest from a mix of existing and new investors including pension and sovereign wealth funds, insurers and family offices, CITIC Capital said in a statement on Thursday.

Like the previous funds, the latest fund, which is dollar-denominated, will seek control-investment opportunities with a China angle across sectors, including consumer, healthcare and technology, it said.

CITIC Capital joins several China-focused private equity and venture capital managers who raised $17.3 billion in dollar-denominated funds in the first half of 2019, versus $13 billion over the same period last year, according to data provider Preqin.

Founded in 2002, the firm has over 200 portfolio companies and is known for its investment in leading Chinese delivery business SF Express and the Chinese unit of McDonald’s MCD.N.

In 2016, it also joined a consortium here formed by gaming and social media heavyweight Tencent Holdings Ltd 0700.HK to acquire Finnish game developer Supercell.

With the new fund, Hong Kong-based CITIC Capital manages over $26 billion in assets, with investment focus on traditional private equity deals, real estate and asset management. It raised $1.58 billion for its third China buyout fund in 2017.

Reporting by Julie Zhu; Editing by Michael Perry and Muralikumar Anantharaman