Luckin Coffee startup backer raises over $2bn

China’s Centurium Capital, a big backer of domestic startup Luckin Coffee, said it has raised more than $2 billion in its debut fund. (Reuters)
Updated 03 July 2019

Luckin Coffee startup backer raises over $2bn

  • US dollar fund will help firm invest in Chinese VIEs
  • Centurium invested $180m in Luckin Coffee’s first two funding rounds

HONG KONG: China’s Centurium Capital, a big backer of domestic startup Luckin Coffee, said it has raised more than $2 billion in its debut fund, giving the private equity firm more firepower to cut deals involving the world’s second-largest economy.

The firm, co-founded by the former head of Warburg Pincus Asia Pacific, David Li, said on Wednesday that Centurium Capital Partners 2018 L.P. raised the sum in US dollars.

The fund secured strong interest from global investors, known as limited partners (LPs), such as pension funds, sovereign wealth funds and funds-of-funds, it said.

Investors in the fund include Singapore’s GIC Pte Ltd. and Temasek Holdings, Canada’s Ontario Teachers’ Pension Plan, China Investment Corp. (CIC) and US pension fund Washington State Investment Board, said two people with knowledge of the matter.

Centurium declined to comment on the fund’s LPs. All the investors didn’t immediately respond to requests for comment.

The US dollar fund will help Centurium invest in Chinese firms that use overseas structures such as variable-interest entities.

Centurium joins several China-focused private equity and venture capital managers who raised $17.3 billion in dollar-denominated funds in the first half of the year, versus $13 billion over the same period last year, according to data provider Preqin.

Launched in March 2018, Centurium’s maiden fund reached the first close of nearly $1 billion three months later and has beaten the $1.5 billion and $1.98 billion fundraising targets since then.

Beijing-based Centurium was set up in early 2017 by Li and two other partners. Li had worked with Warburg Pincus for 14 years and led several investments for the US buyout firm in China, including in top car rental service provider CAR Inc. 

“After helping several entrepreneurs fulfill their entrepreneurial dream for so many years, I also have my dream of launching our own (investment) firm,” Li said.

Centurium primarily seeks control and significant minority investment opportunities across China’s consumer, services and health care sectors where it looks to boost operational efficiency and tackle structural deficiencies.

“The Chinese business environment nowadays needs a new generation of investors that combine the global PE best practice and local experience,” Li said.

“Instead of being a pure capital provider, firms like Centurium can better integrate with local markets, and be more efficient and responsive to provide bespoke local solutions to new challenges and opportunities.”

Centurium began to gain recognition last year when it made a big bet on Luckin Coffee, the Chinese challenger to Starbucks Corp. It invested about $180 million in Luckin in the startup’s first two fundraising rounds.

Li said that Centurium has invested about 40 percent of the capital raised in the debut fund in five firms in China and aims to fully deploy the fund by the end of next year.


HSBC, StanChart shares fall to 22-year lows

Updated 22 September 2020

HSBC, StanChart shares fall to 22-year lows

  • Falls follow reports on movements of allegedly illicit funds; shares fall amid wider selloff in stocks

LONDON: HSBC’s shares in Hong Kong and Standard Chartered’s in London fell on Monday to their lowest since at least 1998 after media reports that they and other banks, including Barclays and Deutsche Bank, moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.

BuzzFeed and other media articles were based on leaked suspicious activity reports (SARs) filed by banks and other financial firms with the US Department of Treasury’s Financial Crimes Enforcement Network (FinCen).

HSBC shares in London fell as much as 5 percent to 288 pence, their lowest intraday level since 2009, after the lender’s Hong Kong shares earlier touched a 25-year low. The stock has now nearly halved since the start of the year.

StanChart dropped as much as 4.6 percent in London to its lowest since 1998, against the backdrop of a broader sell-off in the market with the STOXX European banks index down 4.8 percent.

More than 2,100 SARs, which are in themselves not necessarily proof of wrongdoing, were obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists (ICIJ) and other media organizations.

In a statement to Reuters on Sunday, HSBC said “all of the information provided by the ICIJ is historical.” The bank said that as of 2012 it had embarked on a “multi-year journey to overhaul its ability to combat financial crime.”

StanChart said in a statement it took its “responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs.”

Barclays said it believes it has complied with “all its legal and regulatory obligations, including in relation to US sanctions.”

The most number of SARs in the cache related to Deutsche Bank, whose shares fell 5.2 percent on Monday. In a statement on Sunday, Deutsche Bank said the ICIJ had “reported on a number of historic issues.”

“We have devoted significant resources to strengthening our controls and we are very focused on meeting our responsibilities and obligations,” a spokesperson for the bank said.

London-headquartered HSBC and StanChart, among other global banks, have paid billions of dollars in fines in recent years for violating US sanctions on Iran and anti-money laundering rules.

The files contained information about more than $2 trillion worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious. 

The ICIJ reported the leaked documents were a tiny fraction of the reports filed with FinCEN. HSBC and StanChart were among the five banks that appeared most often in the documents, the ICIJ reported.

“It confirms what we already knew — that there are huge numbers of SARs being filed with relatively low numbers of cases brought through to prosecution,” said Etelka Bogardi, a Hong Kong-based financial services regulatory partner at law firm Norton Rose Fulbright.