3C AGI Partners, founded by former SenseTime Group Inc managing director Esther Wong, is launching an artificial intelligence venture fund backed by a family office that runs money for some of Hong Kong’s richest families.

The fund is targeting as much as $100 million by March, after raising $50 million in a first close in November, Wong said in an interview in Hong Kong. 3C AGI has already deployed money from an initial 2023 AI fund.

Wong said the fund will focus on the “picks and shovels” of AI infrastructure such as hardware and data centers, and is steering clear of the AI application space, which she views as overvalued and saturated with short-term investors.

While the debut 2023 fund focused on US companies, the new vehicle will adopt a broader “US Plus” mandate, according to Elton Cheung, a partner at VMS Group, the Hong Kong family office that’s backing the fund. The strategy aims to keep its exposure to North American and global startups, balancing the firm’s traditional stronghold on the Chinese mainland.

VMS, which runs more than $4 billion, declined to disclose its commitment to the fund, but noted that investors from the first fund are continuing their support for the second one.

“The US market drives hot demand,” Cheung said in the same interview.

VMS is affiliated with the billionaire Cheng family that controls real estate giant New World Development Co, people familiar with the matter have said, asking not to be identified discussing private information. Cheung declined to comment on a relationship with the Cheng family, saying VMS doesn’t disclose the identity of its investors.  

Investments from the first fund include AI chipmakers Cerebras Systems Inc and Groq Inc, as well as Starcloud, a space-based data center company. The fund’s relatively small size allows Wong to be selective with potential backers, such as a Middle Eastern royal family or one of Asia’s largest data centers.

Outside of the new fund, VMS continues to find high-value hardware opportunities on the mainland. The multifamily office recently doubled down on chip manufacturer Xheart, a spinoff from autonomous driving firm Momenta Global Ltd.

The fund launch coincides with a thawing of the private equity market in Asia, driven largely by a surge of interest in generative AI and hardware.

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“The capital markets in Asia are revitalizing, and we are seeing a clear rebound in confidence,” Cheung said.