CD&R partner Principle Capital hits near-$200 mln first close

  • Fund IV targets $350 mln
  • Firm’s first dollar-denominated fund
  • Firm is a strategic partner with CD&R

Principle Capital, a Shanghai, China, firm that partners with Clayton Dubilier & Rice, hit a first close on its fourth fund on almost $200 million, according to sources with knowledge of the situation.

Principle Capital Fund IV is targeting $350 million, and has another $100 million circled but not closed, one of the sources said. Fund IV is the firm’s first dollar-denominated fund, the source said.

Principle Capital could not be reached for comment.

The firm was formed in 2002. It is led by Chief Executive Officer Lin-Lin Zhou, formerly president of Digital Video System. Managing directors include Zhong-Ren Jing, Pencia Yin, James Ahn and George Sun. Ahn also is a managing director at CD&R.

Principle focuses on Chinese middle-market companies with enterprise values of $50 million to $300 million in the industrials and services sectors. The firm looks for opportunities around owners facing succession issues, other PE funds selling assets acquired in 2010 to 2012 and big companies selling non-core assets.

Since inception, the firm has generated a 5.4x gross multiple and a 41 percent gross internal rate of return, one of the sources said.

Action Item: Principle Capital’s website:

A policeman, wearing a mask to protect from severe pollution, secures the area near the Great Hall of the People before the opening session of the Chinese People’s Political Consultative Conference in Beijing on March 3, 2016. Photo courtesy Reuters/Kim Kyung-Hoon