Tembusu Partners to launch new China liquor fund

Singapore-based private equity firm Tembusu Partners is seeking to invest up to RMB 2 billion for its first China Guizhou Baijiu fund. The fund will target baijiu foundation spirits within the Guizhou region.


Singapore/Shanghai, China, 6 November 2019 – Tembusu Partners Pte Ltd (“Tembusu”), a boutique private equity investment firm headquartered in Singapore, announced today the launch of its first China Guizhou Baijiu Fund (“Fund”) in partnership with the Renhuai city government-linked Renhuai Moutai Flavor Liquor Industry Development & Investment Co., Ltd (“Jiutou”) in Guizhou province in Southwest China. Within China, Tembusu is known as Ruishu (“瑞树”).

The fund was officially launched today following signing ceremonies at the China International Import Expo (“CIIE”) and Singapore-China Trade & Investment Forum held in Shanghai. The Fund will invest up to RMB 2 billion in the procurement, storage and processing of top-quality baijiu foundation spirits within the Guizhou region, with Jiutou committing to invest up to RMB 670 million.

Known as the “liquor capital of China”, Renhuai is a county-level city in Guizhou province, home to Moutai liquor and the Renhuai Red Sorgum, a key but scarce raw ingredient necessary to produce quality baijiu. The Fund will allow international investors access to the explosive growth in Moutai flavoured baijiu, also known as sauce-aroma baijiu, through the early foundational years of the baijiu production process, which spans five years. The value of baijiu appreciates with age, thus presenting opportunities for stable investment returns.

According to a Euromonitor report in 2018, baijiu consumption is set to grow at a compound annual growth rate of 10.1% by 2022. Baijiu makes up 90% of total spirits sales in China and half of China’s alcohol sales. The Fund thus serves as a platform for international investors to gain access to the fast-growing baijiu industry in China.

Tembusu was the first and only foreign private equity fund manager to be awarded the Qualified Foreign Limited Partner (“QFLP”) status in Guizhou province from the State Administration of Foreign Exchange in 2018. The QFLP status accelerates the process for foreign investments into domestic enterprises in China by creating an “express lane” for regulatory approval and taxation, thereby bypassing the issue of foreign currency convertibility. With operations in Shanghai and Guiyang, the provincial capital of Guizhou, Tembusu is a registered private equity fund manager with the Asset Management Association of China and holds a Capital Markets Services license issued by the Monetary Authority of Singapore.
In line with its overall strategy to expand its presence in China, Tembusu will continue to explore investments in sectors such as technology, infrastructure, healthcare, tourism and impact related projects in China. By leveraging on its QFLP status, investee companies will also be eligible for financial incentive schemes from the Chinese government. This will pave the way for more to participate in the fast-growing Chinese market and open up new opportunities for Tembusu in bridging investment communities of China, Southeast Asia and rest of the world.
Mrs Lim Hwee Hua, Co-Chairman, Tembusu Partners, said:

“China continues to be an important and strategic market for Tembusu. Tembusu is pleased to launch the first Guizhou Baijiu Fund to finance promising baijiu businesses and support their development towards high-quality growth, as we expand and deepen our commitment in China’s dynamic economy. In a climate of complexity and change, our thesis-driven approach allows us to find unique and compelling opportunities for international investors to participate in the significant development potential in Guizhou and in Greater China.”

Mr Li Wu, Chairman, Renhuai Moutai Flavor Liquor Industry Development & Investment Co., Ltd, said: “We are pleased to partner with Tembusu to open access to the fast-growing Chinese baijiu market, as China shifts towards consumption-driven growth and innovation. We are committed to investing alongside Tembusu to nurture our homegrown sauce-aroma baijiu production enterprises, the development of the Renhuai liquor production region’s brand and transformation of the industry.”

Tembusu Partners is a private equity investment firm that invests in promising early and growth-stage companies with a view to generate sustainable returns for both investee companies and investors. Besides supporting companies through mezzanine and equity financing, it also contributes operational expertise to help them grow. Headquartered in Singapore, its primary geographical markets are within Emerging Asia – comprising China, India and Southeast Asia. For more information, please visit www.tembusupartners.com.