Chinese venture capital firm GSR Capital is launching a US$5 billion fund that will acquire industrial and emerging technology companies globally.

 

The global M&A market has seen continuous growth with the total transaction value in 2014 exceeding US$3.5 trillion. GSR Global M&A Fund, as one of the very few large-scale buyout funds in China, will target international investment opportunities in qualified leading enterprises in sectors including clean energy, bio-pharmaceutics and life sciences, bulk commodity investment, traditional and internet finance, wireless communication, and cultural industry.

 

"Our new fund will either buy-out or acquire a minority stake in target enterprises through a combination of equity and leveraged debt; and then we will create value for them by convergingChina and global resources, adopting cross-border and technical arbitrage and eventually realizing the capital gains through IPO or M&A exits," said Sonny Wu, co-founder of GSR Ventures and chairman of GSR Capital.

 

The GSR Global M&A fund is anchored on a US$1 billion committed by GSR GO Scale Capital Limited Partners and institutional investors. The fund will be managed by GSR GO Scale Capital Advisor Ltd, the management arm of GSR GO Scale Capital Growth Fund. The advisor will work closely with Good Resources Holdings Limited on the management of all M&A deals with leverage of financial instruments, including co-investments from the global capital market.The fund will be managed by a team of industry leaders led by Wu.

 

“GSR GO Scale Capital, its partners and affiliates are on track to become one of the most outstanding and auspicious buyout groups of their generation and region," said Edward Frazer, founder and CEO of Trinity Limited, a UK-based private investment banking firm that worked with GSR Capital in the past deals.

 

Prior to the formation of this Global M&A Fund, GSR GO Scale Capital had already established a SPV to acquire 80.1% of the shareholding of Lumileds, the original LED component and the automotive lighting company under Royal Philips.