The largest Chinese investors you’ve never heard of

When China’s economy roared back to life following the successful handling of the pandemic, it was domestic private equity and venture capital firms that powered the resurgence. Though global firms like Sequoia and Warburg Pincus continue to play a role in China’s markets, domestic firms are becoming indispensable to China’s post-pandemic economy. Below are the largest Chinese private equity and venture capital firms you’ve never heard of.

Hony Capital

• Year Founded: 2003
• Headquarters: Beijing, China
• Assets Under Management: $10 billion
• Most famous deals: WeWork, $430 million, 2016; PizzaExpress, €900 million, 2014

Established in 2003, Hony’s investing profile tells a story of a firm with both tight connections to the state as well as global aspirations. Founded with capital from Legend Holdings, the controlling shareholder of the Lenovo Group, Hony became the first private equity company to register in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, a commercial development in Shenzhen. With $10 billion dollars in assets under management, the firm grew on the strength of its ability to restructure state-owned groups, like CSPC, a pharmaceutical giant, and Zoomlion, a construction machinery company. As the firm expanded, it set its sights on international targets, investing in western companies like WeWork and PizzaExpress in landmark deals of $430 million and 900 million Euros, respectively, in an attempt to help integrate each company within the Chinese economy. Both deals, however, would falter as each company failed to reach its expansion goals in China and neither brand could win over Chinese consumers. The firm’s failure to launch a successful integration campaign with western brands is an example of the potential pitfalls Chinese private equity firms face when expanding globally.

CPE

• Year Founded: 2008
• Headquarters: Beijing, China
• Assets Under Management: Over $15 billion
• Most famous deal: Baidu’s AI chip Kunlun, valued at $2 billion, 2021

CPE’s investments groups mirror the most active sectors of China’s current economy: healthcare, consumer and internet, software and enterprise services, and technology and industrial. The fund ranks as China’s second-largest firm by assets under management, as its total assets exceed $15 billion. Its most recent deals and investments reflect a shift towards healthcare and technology, as the firm led the financing for Baidu’s AI Chip Kunlun, valued at $2 billion, and facilitated MicroPort CardioFlow Medtech’s IPO, a company that manufactures devices to prevent heart disease.

IDG Capital

• Year Founded: 1992
• Headquarters: Beijing
• Assets Under Management: Over $7 billion
• Most famous deal: MGI Tech, $1 billion funding round, 2020

IDG Capital was founded in 1992 in Boston and was acquired by China Oceanwide Holdings Group Co in 2017. It is one of the oldest private equity firms in China and the first foreign investment firm to enter China in the 1990s. IDG is a major player in the Chinese private equity market specializing in tourism, luxury goods, and e-commerce. The firm’s most famous investments include Moncler, an Italian luxury lifestyle brand, and Farfetch, a luxury fashion online platform from the United Kingdom. Its assets under management total to over $7 billion dollars, and its recent investments have followed a regional trend in healthcare and technology; IDG co-led a $100 million funding round in Biotheus, a biotech firm working on the treatment of malignant tumors and autoimmune diseases, as well as the autonomous driving unit of Didi.

China Merchants Capital

• Year Founded: 2012
• Headquarters: Shenzhen, China
• Assets Under Management: $41 billion
• Most famous deal: UNITOP, 3 billion RMB angel round, 2016

The Shenzhen-based firm is ranked as the largest Chinese private equity firm by Private Equity International, and its assets under management totaled over $41 billion as of 2019, a total that rivals some of the largest international funds. The firm began as a part of China Merchants Group, a state-owned conglomerate, but broke off in 2012 and now manages 37 of its own private equity funds. Its capital comes from both government entities and privately-run businesses, an analyst explained in 2020. The funds’ myriad investments range from radio and television network providers like Zhujiang Digital Media to manufacturing and supply corporations like China International Marine Containers.

Trustbridge Partners

• Year Founded: 2006
• Headquarters: Shanghai, China
• Assets Under Management: $11 billion
• Most famous deal: Fenbi, $390 million round, 2021

Based out of Shanghai since 2006, Trustbridge is a global fund with over $11 billion assets under management. With offices in Boston and Hong Kong as well, the firm is at the forefront of China’s private equity trends, as a large number of its investments are in education, e-commerce, and healthcare. In January, Trustbridge spearheaded a $400 million Series C funding round for Hive Box, a company based out of Shenzhen that operates a network of self-service drop-off and pick-up stations. In February, the fund partnered with CPE and IDG Capital to hold a $390 million funding round for Fenbi, a Beijing-based company that provides vocational education examination services.

Primavera Capital Group

• Year Founded: 1995
• Headquarters: Beijing, China
• Assets Under Management: $3.4 billion
• Most famous deal: ByteDance, $3 billion round, 2018

A Beijing-based firm, Primavera ranked 78th on Private Equity International’s list of the top 300 private equity firms worldwide. The fund manages over $3.4 billion in assets spread across rapidly growing sectors like artificial intelligence, fintech, and education. Primavera has invested in Alibaba, Yum China, and XiaoPeng, a Chinese electric vehicle company. In May, Primavera led a $260 million Series F funding round in Beisen, a talent management and measurement solutions company in Beijing.

CMC Capital Partners

• Year Founded: 2010
• Headquarters: Beijing, China
• Assets Under Management: $2.5 billion
• Most famous deal: Bilibili, $199 million Series C round, 2016

Founded in 2010, CMC Capital Partners is one of the newest up-and-coming Chinese private equity firms. The fund controls over $2.5 billion in assets across three US-dollar funds and two RMB funds, and it recently completed its largest fundraising campaign to date, raising $950 million in February of this year. The firm has positioned itself at the intersection of technology and internet trends, investing in video technology like IMAX as well as the video platform Bilibili.

YunFeng Capital

• Year Founded: 2010
• Headquarters: Shanghai, China
• Assets Under Management: $10 billion
• Most famous deal: Kuaishou Technology, $3 billion round, 2019

Co-founded by Jack Ma, YF Capital is another new player amid China’s growing private equity field, following similar activity trends as its counterparts, with the majority of its investments in internet, e-commerce, and healthcare companies. Most recently, the fund partnered with CMC Capital to lead a 1.5 billion yuan investment round for Shiyue Daotian, a modern agriculture enterprise group. YF has been involved in a number of landmark deals in China’s fastest-growing sectors: it led a $300 million round for Yuanfudao, an e-learning company, and also captained a $400 million round for Horizon Robotics, an AI-focused company.

DCP Capital

• Year Founded: 1994
• Headquarters: Beijing, China
• Assets Under Management: $2.5 billion
• Most famous deal: Yuanfudao, $1 billion round, 2020

A firm that previously led KKR and Morgan Stanley’s private equity endeavors in China, DCP has pursued a number of investments in unique industries, holding over $2.5 billion in assets under management. The fund has pursued multiple investments in dairy companies like Mengniu Dairy, Modern Dairy, and Asia Dairy. It has also mirrored multiple investment trends within China, participating in the rapidly growing education sector with a $1 billion round for Yuanfudao, a $390 million round for Fenbi, as well as leading a $100 million round for Valgen Medtech, which focuses on treatment for heart disease.

Centurium Capital

• Year Founded: 2017
• Headquarters: Beijing, China
• Assets Under Management: Over $2 billion
• Most famous deal: Luckin Coffee, $150 million Series B round, 2019

Co-founded in 2017 by David Li, the former head of Warburg Pincus Asia Pacific, Centurium has made a few bold bets that have paid dividends for the new fund. The firm was one of the earliest and biggest backers of Luckin Coffee, a chain that has grown to be China’s second-largest coffee network. In July of 2019, the firm announced it had raised $2 billion in its debut fund, which powered a string of investments in the following years. Today, Centurium’s investment profile is defined by software, supply chain management, and logistics; one of its biggest recent investments was in Illuvatar CoreX, leading a 1.2 billion yuan funding round for the developer of high-performance computing systems.

Qiming Venture Partners

• Year Founded: 2006
• Headquarters: Shanghai, China
• Assets Under Management: $5.9 billion
• Most famous deal: Bilibili, Series C $161 million funding round, 2015

Focused on growing companies in the TMT and healthcare sectors, Qiming owns nine U.S. dollar funds and six RMB funds, totaling $5.9 billion assets under management. The firm was an early investor in ByteDance, Xiaomi, and Bilibili and has since grown to lead funding rounds for a number of healthcare and biotechnology startups, most recently participating in a $255 million Series C funding round for Insilico Medicine, which is developing an AI platform for drug development to treat cancer and other age-related diseases.

Shenzhen Capital Group

• Year Founded: 1999
• Headquarters: Shenzhen, China
• Assets Under Management: $63 billion
• Most famous deal: LeEco, $32.5 million Series A funding round, 2013

Founded by the Shenzhen Municipal Government and a group of private partners, Shenzhen Capital Group has since transitioned into a privately owned and managed venture capital firm. The fund controls a mammoth $63 billion across its holdings, which are most concentrated in equipment manufacturing and supply chain services. In 2013, the fund launched an ambitious investment in LeEco, a Chinese tech venture that hoped to be a global leader in video streaming and electric cars. Despite Shenzhen’s backing, LeEco collapsed because of unhealthy reliance on debt to fund projects, resulting in the CEO, Jia Yueting, being blacklisted in China in 2017 for having an outstanding debt payment of over $72 million. With backing from the government, however, Shenzhen weathered the storm of LeEco’s collapse and has continued to invest in ambitious projects. In May, the firm led a 200 million RMB Series C funding round for Rokae, an industrial robot supplier.

Addor Capital

• Year Founded: 2014
• Headquarters: Nanjing, China
• Assets Under Management: $17 billion
• Most famous deal: Dayun Auto, 1.8 billion RMB Post-IPO Equity, 2017

With a particular focus on the automotive and manufacturing industries, Addor Capital is one of the larger venture capital firms in China. Backed by the state-owned Jiangsu High-Tech Investment Group, Addor Capital is part of the Yida Capital conglomerate of firms. The fund’s recent activity is largely centered around technology and biotechnology, as notable investments include leading a $15 million round for Showmac Tech, a Beijing IoT company, and a $15.5 million round for Pengda, a manufacturer of carbon-based materials used as purification agents.

5Y Capital

• Year Founded: 2008
• Headquarters: Xuhui, Shanghai, China
• Assets Under Management: $5 billion
• Most famous deal: Kuaishou, $1 billion funding round, 2018

Formerly known as Morningside Venture Capital, 5Y Capital recently completed a $2 billion funding round for its USD and RMB funds, fundraising that has laid the backbone for the firm’s investments in 2021 in areas such as manufacturing, artificial intelligence, and biotechnology. One of the firm’s most successful bets was its investment in Kuaishou in 2018, an online video platform rivaling ByteDance’s Douyin that reached 1 billion global monthly users in June.

Source Code Capital

• Year Founded: 2014
• Headquarters: Beijing, China
• Assets Under Management: $3.8 billion
• Most famous deal: YunQuNa, $100 million Series D funding round, 2021

A newer player on the venture capital scene, Source Code has participated in some of the most notable funding rounds for Chinese companies like Meituan, ByteDance, and Baidu. The fund has committed a large number of its investments to the financial services and ecommerce sectors but has recently pursued a number of different industries such as artificial intelligence through an investment in Mech-Mind, a robotics company.