December 20, 2016

Hosen Capital’s third agribusiness fund Hosen Investment Fund III is expected to close oversubscribed and exceeding its $400 million target by the end of this year.

Founded in 2010 and headquartered in Beijing and with additional offices in Chengdu, Shanghai, and Guangzhou, Hosen Capital was spun out of New Hope Capital, the financial management arm of New Hope Group. Led by former New Hope Capital team members, Chris Wang and Alex Zhang, Hosen has $2.31 billion in assets under management and focuses on investments in companies in the food and agribusiness-related companies that are either directly located in China or are directly involved in meeting demand on the Chinese market.

Existing companies Hosen Capital’s portfolio include the Beijing-based agricultural product wholesale market, Xinfadi, Illinois-based meat processor and food manufacturer, Ruprecht Company, and Australian beef processor, Kilcoy Pastoral Company.

New Hope

Started in 1997 as a chicken farm by its chairman, Liu Yonghao, New Hope has become one of China’s top animal feed producers, with annual property and business sales reaching US$13.83 billion. Currently, New Hope Group has a presence in countries including Australia, New Zealand, and Indonesia, however, Liu told Reuters on the sidelines of the China’s annual parliament meeting that the group is accelerating its fundraising efforts to support overseas acquisitions and expansion in an effort to evolve beyond an animal feed company.

In February of this year the group launched a 3 billion yuan (US$460 million) fund with the Harvest Fund and the Zhejiang provincial government for the purpose of funding these acquisitions, to which Hosen Capital committed $450 million as a second, diversified funding source.

China to Pump Private Funds

Opportunity for China-focused agricultural investment may be entering a key window in time. China’s National Development and Reform Commission (NDRC) and its Ministry of Agriculture just released a joint announcement that there is a push underway to open the country’s agricultural industry to greater private equity investment as a means to prompt supply-side agricultural reforms.

The announcement was made as Chinese leaders conducted a specified annual conference tasked with reviewing the country’s agricultural progress throughout 2016 and to plan the direction of the industry for the coming years.

Indeed, institutional investors may already be capitalizing on this liberalization of the investment framework, as the announcement of the pending close of Hosen’s third fund comes on the heels of reports that the International Finance Corporation (IFC), the investment arm of the World Bank, is committing $30 million to the fund.

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Lynda Kiernan