Princeling Zeng helping state firm raise funds

PUBLISHED : Thursday, 01 March, 2012, 12:00am
UPDATED : Thursday, 01 March, 2012, 12:00am


Jeffrey Zeng, the son of former vice-premier Zeng Peiyan, is helping CITIC Capital raise a US$150 million venture capital fund that focuses on domestic small and medium-sized enterprises (SMEs). CITIC Capital is an investment unit of China's sovereign wealth fund.

Zeng, who studied in Japan and the United States, is well known in the mainland's financial community for his successful investments over the past decade. They include bets on US-listed, the mainland's top online book retailer.

The 44-year-old princeling is reticent about his family background and rarely talks about his family, even with close friends.

His father retired as vice-premier in 2008. Zeng Snr, 74, currently heads a high-level government think tank called the China Centre for International Economic Exchanges.

'Jeffrey is very low key ... he is trying to build his own reputation in the investment circle, rather than to be remembered as someone's son,' said a Hong Kong-based finance executive who is close to him.

According to a company statement, CITIC Capital Venture Partners (CCVP) secured US$60 million last week after completing its first round of fund-raising. It aims to raise US$150 million in total.

CCVP will focus on investments in Chinese SMEs in three sectors - consumer, clean technology, and information technology, which are seen as having high growth potential in China.

CCVP is the first venture capital fund of CITIC Capital, which also manages some buyout funds. These funds target big investments that typically exceed US$100 million in deal size.

Venture capital funds usually focus on small firms, particularly start-ups.

Zeng has been appointed CCVP's managing partner but he will retain his position as a senior managing director at CITIC Capital, according to the statement.

A spokeswoman for CITIC Capital declined to comment on Zeng's family background.

CITIC Capital - sometimes dubbed 'China's Blackstone', a reference to the major US private equity firm - is owned by China Investment Corporation, the nation's US$300 billion sovereign wealth fund, and CITIC Group, China's top financial conglomerate.

As of last week, some early investors in CCVP included Vertex Asia Growth, a wholly-owned unit of Singapore's sovereign fund Temasek Holdings, and Enspire Capital, a Singapore-based investment firm.

Prior to helping CITIC Capital launch CCVP, Zeng had set up a small yuan-denominated investment fund for Kaixin Investment about five years ago that was partly funded by the state-owned China Development Bank.

Kaixin has so far invested about 900 million yuan (HK$1.1 billion) in nine deals.

After Zeng launched CCVP, he remained involved with Kaixin, although his responsibilities were largely limited to managing its existing portfolio firms rather than making further major investments, said a person with knowledge of the matter.