Tim Burroughs | Asian Venture Capital Journal | 03 Jul 2015 | 13:05
Ascendent Capital Partners has reached a first and final close on its second China fund at the hard cap of $600 million. The vehicle has been in the market for around four months, following an official launch in March.
LP demand at the first close was significantly larger than the GP's overall target of $500 million, according to a source familiar with the situation. However, the team decided against raising the hard cap.
Ascendent closed its debut fund at $365 million in 2012. Investments include pork producer WH Group, which went public in Hong Kong last year. Ascendent has now fully exited its position in the company. A second exit is expected later this month or next month with the sale of Nano Resources, a components manufacturer for highspeed trains. It is expected to deliver a 6x return.
The GP is also an investor in Dianping, a Chinese entertainment listings and group buying platform that earlier this year completed a $850 million round of funding at a valuation of approximately $4 billion.
Ascendent brings what has been described as a merchant banking style approach to private equity, providing companies with capital in conjunction with advice and solutions. This is in keeping with the two founders' backgrounds. Liang Meng and Kevin Zhang met when advising CNOOC on the attempted acquisition of Unocal in 2005 Meng was leading J.P. Morgan's M&A team and Zhang was on the capital markets side at Goldman Sachs.
Meng went on to lead D.E. Shaw's Greater China investment business while Zhang worked for Trustbridge Partners. Between 2007 and 2011 before joining forces to set up Ascendent they coinvested around $600 million in China private equity deals.
Speaking to AVCJ last year, Meng and Zhang observed that the advisory approach is particularly relevant in the present environment in China. Entrepreneurs are becoming more sophisticated, making them open to transactions they would not have considered 10 years ago, while the economy is slowing, which means companies are interested in solutions such as M&A that offer synergies and change the competitive landscape.