Asian Tech Press (Aug 25) -- Sequoia Capital China, the Chinese arm of U.S. venture capital firm Sequoia Capital, has quietly launched a new fund aimed at trading stocks of publicly listed health and biotech companies, two people familiar with the matter said, The Information reported Tuesday.
This is the Chinese arm’s second hedge fund. As the traditional lines between public and private market investors are currently being further blurred, it hopes to capitalize on the booming global trend in biotechnology.
The new fund, called Sequoia China Healthcare Partners, has been established in Hong Kong. It has never been reported in the media before, and its size is not known to the outside world. It focuses on the stocks of Chinese biotech and healthcare companies listed outside of mainland China. That means the Sequoia fund could take advantage of the current prices for Chinese health stocks, which have fallen since July.
People familiar with the matter said the fund was registered in May this year and is headed by Zhenning Frank Sun, who became a partner of Sequoia Capital China a few months ago. Before joining Sequoia, Sun was a portfolio manager at Greenwoods Asset Management Co. Ltd., where he was in charge of the healthcare fund.
The venture capitalists said the new fund for public healthcare equities reflects growing demand from Chinese biotech startups that want investors to back them through private funding rounds and after they go public.
Sequoia Capital China's health and biotech startup investments include Bota Biosciences, a company developing microorganisms for use in industrial products, and D3 Bio, Inc., a company founded by oncologist George Chen. Sequoia Capital China recently said that it helped establish a genomics startup incubator in Shanghai.
Neil Shen, founding and managing partner of Sequoia Capital China, has been on the top of Forbes Midas List of 100 Best Venture Capital Investors for three years in a row until 2020, and has invested in a number of high-profile Chinese tech companies, including Meituan and Pinduoduo.
Last year, Sequoia Capital China established its first public fund, Sequoia Capital Equity Partners, to invest in Chinese companies listed overseas. Meanwhile, U.S.-based Sequoia Capital has long run Sequoia Capital Global Equities, a fund that invests in both public and late-stage private companies.
While there are some challenges to Sequoia China's latest attempt, Chinese venture capital and private equity investors still believe that biotechnology and other medical-related innovations will be one of the most promising areas for future growth and will bring substantial returns in the future.
