Local funds outside the international radar screen – a successful investment in a niche growth fund

AddVenture is able to identify and accurately evaluate low-key, local niche funds, an area where information is not easily accessible. This type of strategy is important as large brand-name funds do not always deliver the best returns. A successful example of this approach is the selection of a small-sized growth capital fund in China which focuses on the TMT and healthcare areas.

Although not necessarily on the radar screens of foreign investors because of its discrete operating approach, this fund had a very able managing partner and strong backers in the shape of a Chinese insurance company and a Singaporean institutional sponsor. AddVenture recommended the fund to a select group of clients and performed detailed reference checks and due diligence, leading to investment. The fund realised a spectacular exit with one of its early deals, Baidu (China’s major internet search engine), which listed on Nasdaq. Another exit took place on a digital TV deal, resulting in a 3x return over 6 months. The fund manager has since demonstrated a steady exit record with its other portfolio companies.

Our clients and existing investors are pleased with their early investment in this fund, as it has fully delivered on its targets.