Chu Kong a former partner at Actis joined XP Investimentos to aid in their launch of a R$1.25b private equity fund targeting mid-sized Brazilian companies.

(Reuters) Brazilian investment firm XP Inc is preparing to launch a 1.25 billion reais ($297.87 million) private equity fund, according to a securities filing, as the company seeks to offer a broader investment portfolio ahead of its planned IPO.

Former Actis partner Chu Kong has joined XP as a partner to lead the firm’s private equity strategy. Kong, who was at Actis until 2017, was responsible for buying a stake in XP in 2010; the stake was completely divested in 2016.

The fund will target mid-sized Brazilian companies, according to the filing.

Both XP and Kong declined to comment.

The move comes as XP, which has more than 1.5 million clients and 350 billion reais ($83.40 billion) in assets under custody, prepares to list its shares on Nasdaq in December.

XP’s largest shareholders include founder and Chief Executive Officer Guilherme Benchimol, private equity firm General Atlantic, and Brazil’s largest private sector lender, Itau Unibanco Holding SA.

Founded in 2001, XP has become the country’s largest independent investment firm, luring billions of reais in assets from individuals who previously parked their money with retail banks.

XP’s business was mainly boosted by fixed-income products for years, but as Brazilian interest rates hit record low levels, the firm has diversified its portfolio. Private equity funds are part of this strategy.

In the first nine months of 2019, XP posted revenues of 3.7 billion reais and net income of 699 million reais, according to a recent filing ahead of the IPO, expected to be priced next month.

Reuters reported earlier on Tuesday that Kong had joined XP to manage its private equity funds.