Hony

Hony has since raised three more dollar funds totaling more than $2 billion from investors like Goldman Sachs Group Inc., the Stanford University endowment, and Temasek Holdings Pte.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

Lenovo also named a new director, John Zhao , CEO of Legend private-equity unit Hony Capital Ltd. During a teleconference about Lenovo's results, Mr. Liu said Legend Holdings wouldn't take lightly the idea of further reducing its Lenovo stake, and would consider buying more shares if Lenovo's share price fell to a suitable level.

Lenovo Profit Rises 88% Owen Fletcher 2011

Hony's founder and chief executive, John Zhao , is dubbed the "Steve Schwarzman of China"—a reference to Blackstone's co-founder—by many of Hony's Western investors for his early success as a deal maker.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

But Hony saw the renminbi fund as crucial to its survival in an increasingly competitive industry.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

In 2008, Mr. Zhao, who also is known by his Chinese name, Zhao Linghuan , led Hony's effort to launch the country's first yuan-denominated private-equity fund, with five billion yuan in capital.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

A local private-equity firm that started with dollar funds is Hony, founded in 2003 and sponsored by technology-and-investment conglomerate Legend Holdings Ltd., which is also the parent company of PC-maker Lenovo Group.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

Mr. Zhao recalled the reactions from Hony's existing investors when they learned of its plans for a yuan fund.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

But in the race to raise yuan funds, Beijing-based firms like Citic, Hony Capital Ltd., which is backed by a large Chinese conglomerate, and CDH Investments, a pioneer of China's private-equity industry, are benefiting not only from easier access to domestic investors like the country's gigantic pension fund, but also—at least for now—fewer regulatory limits on what they can invest in.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

Hony counts the National Social Security Fund and China Development Bank Corp., a government policy lender, among the investors in its renminbi funds, which now total 15 billion yuan.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011

Hony's first dollar fund, with $38 million in capital, had only one investor: Legend Holdings.

Foreign Buyout Firms in China Lag in Yuan-Raising Race Lingling Wei 2011