China-focused Boyu Capital raises $1.5 bln for 2nd buyout fund-sources

Reuters

* New fund is 50 pct larger than first fund

* Private equity funds raised for China fell 46 pct in 2013-AVCJ

* Boyu's investments include Cinda and Alibaba

By Stephen Aldred

HONG KONG, Jan 17 (Reuters) - China-focused private equity firm Boyu Capital, whose partners include former TPG Capital executive Mary Ma and the grandson of former Chinese president Jiang Zemin, has raised $1.5 billion for its second buyout fund, according to people with knowledge of the matter.

Boyu has received more investor interest than its $1.5 billion target, one person with knowledge of the matter said, though the firm has decided to keep the fund at around $1.5 billion, which is 50 percent greater than its first fund.

The new fund is expected to close within a few weeks, the source said.

Boyu, which was established in 2010, is an investor in e-commerce giant Alibaba Group Holding Ltd and debt manager China Cinda Asset Management Co Ltd. Cinda has risen 48.5 percent since listing in December, while China's biggest e-commerce company Alibaba is widely expected to launch an IPO this year.

Boyu's first fund raised $1 billion in 2011, with big name Asian backers including Singapore state investor Temasek Holdings and Li Ka-shing, Asia's richest person.

In addition to Ma and Alvin Jiang, a so-called princeling thanks to his political ties, Boyu's other partners include ex-Ping An Insurance Group Co of China Ltd executive director Louis Cheung, and former Providence Equity Partners dealmaker, Sean Tong.

Between them, Ma, Cheung and Tong have over 50 years of industry experience, and that pedigree, combined with Jiang's princeling heritage, boosted Boyu's fundraising.

The new fund would be the largest raised for China in 2014, and comes as private equity firms struggle to raise money from investors who are disappointed with returns they have made in Asia's emerging markets.

Funds raised for private equity investing in China fell 46 percent in 2013 to $14.7 billion, the lowest since 2009, according to data from Asian Venture Capital Journal.

Reuters previously reported that Boyu was considering raising a $1.5 billion second fund in June last year.

Boyu declined to comment. Sources declined to be named as details of the fund were private.

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