Lunar Capital targets $380 mln Fund IV

Lunar Capital Management, a consumer-focused buyout shop in China, is seeking $380 million for its fourth fund, sources said.

With offices in Shanghai and Hong Kong, Lunar Capital has been marketing for less than six months, the persons said. They did not know the hard cap for the fund. MVision is the placement agent, the sources said.

Lunar’s fourth fund is bigger than its third pool, which collected $150 million in 2010 along with a $100 million co-investment pool. Lunar increased the size for the new fund because the third pool was too small to do control investments in China, one of the persons said. At $380 million, the private equity firm will be able to do six to eight deals, the source said.

The private equity firm often targets companies in China with succession issues. Businesses in that country are suffering from the country’s “one child only” policy, which leaves some entrepreneurs without a successor, the sources said.

Performance data for Fund III was not available.

Derek Sulger, a former Goldman Sachs executive, founded Lunar Capital in 1999. The PE firm focuses on control investments in consumer companies, including food, beverage and apparel. Investments include Yeehoo, a domestic baby wear brand in China with 1,000 retail locations, as well as Yonghong Food Co, a provider of beef jerky in China.

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