Chinese’s Legend Capital has raised $200m for a continuation fund to transfer over the remaining businesses from its 2008 flagship vehicle, marking one of the first transactions of its type in the country.
Legend said the raise gave it the opportunity to maximize the value potential of the remaining portfolio companies through active management, alongside targeted follow-on capital. The new fund has a five year holding period.
The firm raised $350m for LC Fund IV in 2008 to target venture capital and growth investment firm in China.
Hamilton Lane acted as lead investor in the secondary transaction, with other unnamed institutional investors participating in the syndicate. The investors also committed follow-on capital for strategic investments in the portfolio companies.
Mingchen Xia, Co-Head of Asia Investments at Hamilton Lane, said, “This transaction demonstrates Hamilton Lane’s presence within the Chinese private markets and our ability to execute on complex secondary deals.
“Our deep experience across global private markets and extensive local GP relationships – including with Legend Capital – positions us well for attractive investment opportunities in this region.”
Legend president and managing director Hao Chen said, “Secondary transactions are an important portfolio management tool for Legend Capital.
“They provide LPs with flexible liquidity options and create mutually beneficial solutions for portfolio companies, LPs and GPs.
“They are also a significant link in building a complete private equity eco-system in China.”
Campbell Lutyens acted as exclusive financial advisor to the fund.
Immanuel Rubin, a partner at the firm, said, “The successful completion of a continuation fund for a portfolio of companies is one of the first transactions of its kind in China and an important milestone in the Chinese private equity market.
““We expect to see more transactions such as this one, which demonstrate the opportunities available for GPs in the secondary market.”
Kirkland & Ellis and Rope & Gray served as legal counsel.
Legend Capital currently manages about RMB45bn ($6.4bn) across US dollar and renminbi-denominated funds.
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