Guangzhou-based private equity firm Cornerstone Management, Inc. has filed for a US$70 million initial public offering on NASDAQ, according to its security filing.
Established in 2015, the fund focuses on investments in China-based companies that are publicly listed or seeking to list in the United States, often referred to as U.S.-China concepts stocks. Companies in the TMT sector, such as new economy companies, are favored. Its investments comprise all stages of the investment cycle, including pre-IPO investments, IPO subscriptions, post-IPO secondary market investments (most often in the form of PIPE transactions) and privatizations. The firm had a team of 15 investment professionals as of September 2017.
Its current business model involves identify investment targets first and then raising capital to fund targeted transactions on a deal-by-deal basis, as opposed to calling capital from committed investors. Its investment portfolios include Alibaba Group Holding Ltd, Bilibili, Kingsoft Cloud, Tesla Inc., and Airbnb.
For the six months ended September 30 2017, the firm recorded revenue of US$5.77 million, compared with US$2.48 million in 2016, a 133% increase. It earned 88% of its revenue from fund management services, including subscription fees, management fees and unrealized carried interest, and 12% from financial advisory services.
Its clients primarily include high income individuals in China with an annual salary of RMB500,000 (US$78,250) and above. Its total active high-income individual client base has increased to over 800 in September 2017. Its investor base also includes several major brand name institutional investors in China.
As of September 30, 2017, its individual investors and institutional investors accounted for 97.3% and 2.7% of its total number of investors, respectively, and contributed 77.2% and 22.8% of its total raised capital, respectively.