Yesterday I asked email readers to name the latest U.S. venture firm to seriously consider raising a China fund. Their hint was that it already has some Chinese companies in its general portfolio.
The answer is Highland Capital Partners, which first broached the subject in an LP advisory call last week. The basic idea would be for the China fund to have a dedicated team and its own name (probably some Mandarin translation of “higher ground”) – with Highland serving as a cornerstone limited partner.
This is basically a reflection of two sentiments at Highland: (1) China may offer more attractive investment opportunities than are permitted by international caps in its general fund; (2) It’s difficult to have a U.S.-heavy investment committee perform timely due diligence on Chinese companies, particularly when other firms have such decision-making centered in Beijing.
Again, this is all very early in the process (so early that it still may not happen). No word yet on a potential target, although something between $100 million and $200 million is reasonable (dollar-denominated). No comment from Highland, natch.