TRUSTAR Capital Raises US$1 Billion for Continuation Fund
TRUSTAR Capital has raised US$1 billion for a continuation fund that will hold the Chinese private equity firm’s controlling stake in McDonald Corp’s operations in mainland China and Hong Kong, two sources with knowledge of the matter said.
What is a Continuation Fund?
A continuation fund is a new vehicle created by a private equity (PE) firm to transfer holdings of existing investments. The concept has gained traction in Asia in recent years as PE firms’ exit from companies via IPOs became challenging.
Investors in the Continuation Fund
Sovereign wealth fund Qatar Investment Authority (QIA) has committed the biggest amount to become the anchor investor in Trustar’s continuation fund, said the sources, who declined to be named as the information is confidential.
Other investors in the US$1-billion continuation fund included Chinese sovereign fund China Investment Corp (CIC) and a number of Chinese yuan-denominated investors, they added.
McDonald’s Response
McDonald’s China said the firm was pleased to see Trustar has increased its investment in McDonald’s China, based on “a strong confidence in the growth prospects” of the Chinese economy, as well as the company’s development potential.
The company said its goal to reach 10,000 restaurants remains unchanged. “The transaction further simplifies the ownership structure… with the support of our shareholders, we will continue to drive the future growth of our business.”
Conclusion
TRUSTAR Capital has successfully raised US$1 billion for a continuation fund to hold its controlling stake in McDonald Corp’s operations in mainland China and Hong Kong. The fund is expected to provide an exit to some investors in Trustar’s private equity fund and will also commit capital to a new private equity fund Trustar is raising.
Frequently Asked Questions
Q: What is a continuation fund?
A: A continuation fund is a new vehicle created by a private equity (PE) firm to transfer holdings of existing investments.
Q: Who are the investors in the continuation fund?
A: The investors in the continuation fund include sovereign wealth fund Qatar Investment Authority (QIA), Chinese sovereign fund China Investment Corp (CIC), and a number of Chinese yuan-denominated investors.
Q: What will the capital raised for the continuation fund be used for?
A: The capital raised for the continuation fund will be used to provide an exit to some investors in Trustar’s private equity fund and will also commit capital to a new private equity fund Trustar is raising.
Q: What is the goal of McDonald’s China?
A: The goal of McDonald’s China is to reach 10,000 restaurants and drive the future growth of its business.
