LPs are queuing to invest in Gaorong Capital

A new announcement has unveiled Banyan Capital's new fund.

It is learned from 36Kr - Decoding LP that several listed companies have disclosed that Tianjin Banyan Changying Equity Investment Fund Partnership (Limited Partnership) (referred to as Banyan Changying Fund) has recently signed the partnership agreement, with a target subscribed scale of 3.261 billion yuan.

Looking at the list of shareholders, there are currently 15 partners in total, most of which are listed companies in the real industry —— Junzheng Group, Muyuan Co., Ltd., Zijin Mining, Jiahua Energy, Yifan Pharmaceutical, New Guodu and many others are on the list.

In other words, Banyan Ventures is seeing intensive capital contributions from listed company LPs.

Banyan Capital to Raise 3 Billion Yuan, LPs Come to the Surface

According to the announcement, the manager of Banyan Changying Fund is Tibet Banyan Capital Management Co., Ltd., and the executing partner is Tibet Rongzhan Investment Center (Limited Partnership), which only subscribes 1 million yuan.

This round of capital contribution is led by Junzheng Group.

According to the announcement, Inner Mongolia Junzheng Energy and Chemical Industry Group Co., Ltd. (i.e. Junzheng Group) and its subsidiary Junzheng Chemical each contributed 500 million yuan to Banyan Changying Fund, with a total contribution of 1 billion yuan. The two parties account for 30.67% of the subscribed capital contribution, making them the largest LP in this round.

Junzheng Group is a large domestic integrated circular economy energy and chemical enterprise, which also deploys global chemical logistics, and is a national-level high-tech enterprise —— a typical listed real industry company LP with abundant cash flow.

In addition to Junzheng Group, Jiahua Energy also directly subscribed for capital contribution as the listed company entity, with a contribution of 200 million yuan; Muyuan Industrial Group Co., Ltd., a subsidiary of Muyuan Co., Ltd., subscribed 350 million yuan, which is also an important industrial LP of Banyan Changying Fund. As an agricultural industrial capital, Muyuan leverages the GP's investment research capabilities to deploy tracks such as AI and advanced manufacturing to realize diversified capital allocation.

Zijin Mining also joined in. This time, Zijin Mining Equity Investment Management (Xiamen) Co., Ltd. subscribed 300 million yuan, which is the private equity investment platform under Zijin Mining, the leading non-ferrous metal enterprise on A-share market.

In addition, New Guodu Technology (Guangzhou), a wholly-owned subsidiary of A-share listed company New Guodu, and the subsidiary of Yifan Pharmaceutical each subscribed 100 million yuan; Hainan Biosails Biotech contributed 400 million yuan, and other private equity institutions, biotech companies and other entities also made investments.

Listed companies in the chemical, agriculture and animal husbandry, mining, and pharmaceutical sectors have jointly made investments, forming the industrial LP background of this phase of Banyan fund.

It is reported that the fund has a duration of 7 years, and will invest in domestic emerging industries to carry out direct and indirect equity investment. According to the announcements of listed companies, the fund has signed the partnership agreement, has not completed the filing with the Asset Management Association of China, and has not yet started project investment.

In terms of income distribution terms, after the distributable cash of the new fund is initially divided according to the source of income and the proportion of paid-in capital contribution, the distribution order to limited partners is: 100% of the paid-in capital contribution is returned first, 90% of the balance is distributed to the limited partner, and 10% is distributed to the general partner as carried interest. In addition, upon the proposal of the executing partner and with the consent of limited partners holding more than 50% of the partnership shares, the fund can make non-cash distribution.

Listed Companies Are Queuing to Become LPs

This scene is in line with the current situation of the venture capital market —— listed companies are queuing up to act as LPs.

Looking back, Banyan Ventures has had a strong background of entrepreneur LPs since its inception. When it was first founded in 2014, Banyan positioned itself as "China's Founders Fund". In the early dollar fund LP list, it gathered a large number of founders and core executives of Internet giants such as Tencent, Meituan, Xiaomi, Baidu, Alibaba, and Focus Media.

Nowadays, it is not uncommon for listed companies to feed back the primary market.

Not long ago, Zhihu released an announcement stating that its wholly-owned subsidiary plans to use its own funds to subscribe for RMB 1.5 billion limited partnership equity of a fund, which is traced back to the newly established fund under Monolith Capital.

Zhihu is not an isolated case. Monolith Capital has attracted many listed companies to extend olive branches —— By-health, Century Huatong, Ancon Medical, Yili-related entities and others all contributed to new funds this year.

These mature companies with industrial resources and abundant capital are embedding themselves into the current technology boom as LPs.

Another example is GigaDevice, whose wholly-owned subsidiary Xinji Jiyi Microelectronics (Hong Kong) Technology Co., Ltd. contributed 100 million US dollars with its own funds last month to subscribe for the share of Yunfeng Investment V, L.P. under YF Capital, so as to invest in Yunfeng Phase V (USD) fund.

Since the beginning of this year, many industrial LPs have invested in USD funds —— Longcheer Technology, Century Huatong, Sanqi Interactive Entertainment, Nanjing Xinbai, Yuxin Technology and others have all announced their investment in overseas private equity funds.

The transformation of listed companies reflects the maturity and closed loop of China's venture capital ecosystem.

This not only directly reflects the capital strength of a company, but also reflects the clear demand for industrial collaboration —— Industrial giants with abundant funds seek business increments through investment, integrate industrial resources, and are also voting for the new round of technology cycle with real money, hoping to share the dividends of the new technology cycle.

To a certain extent, this is a "two-way rush".

This article is from the WeChat official account "Decoding LP", author: Yang Jiyun, published by 36Kr with authorization.