Fangda Advises Buhuo Venture Capital in Raising its US$100m GP-led US Dollar Fund via Yuan-to-Dollar Structuring

Fangda Partners advised Buhuo Venture Capital on the final closing of its Phase I US Dollar-dominated venture capital fund, which raised more than US$100 million. Buhuo’s transaction was backed by two US-based funds of funds and one Asia-based fund of funds. Two limited partnerships (LPs) from Buhuo’s Phase I RMB Fund also participated in the new fund.

Following the closing, Buhuo has become both an RMB and US dollar fund management firm. In the transaction, Buhuo transferred partial stakes in four assets from its initial RMB fund, Buhuo Ventures RMB Fund Phase I, a 2017-founded vehicle, to fund two-thirds of the US dollar fund’s assets, with the remainder being follow-on capital . Buhuo is the latest Chinese general partner (GP) using yuan-to-dollar structuring to raise capital from a more diversified LP base.

Buhuo Venture CapitaI, co-founded by Jay Li and Ray Yi in 2017 and headquartered in Beijing, invests in angel and VC start-ups, with a focus on the Chinese supply chain industry. Many of its investees, such as Zhongneng United, Guoquan, Carzone, HuiIian, Iboxpay, DoIphin Inc., Youxi Movie Hotel, Zhangshangfucai, Wanqian Fasteners, Baishunyangche, and Sharkfit, have become the leading companies in their specialist areas of operation.

Fangda’s investment fund team and corporate financing team provided (together with other firms) the full range of transaction services and legal advice to Buhuo Venture Capital in drawing up all transaction documents and negotiation of the US dollar fund formation, as well as on the yuan-to-dollar fund structuring. The Fangda team was led by investment fund partners Richard Guo and Yue Zhang, and corporate financing partners Avica Wang and Shihua Wang, and other key members included Icy Huang, Serena Zhou, Shirley Lim, Duncan Deng, Kai Wang, Alaric Zhang, and Xin Yue.