CITIC PE to launch $773m mezzanine fund
The private equity unit of CITIC Securities is looking to tap into debt finance by launching a RMB5 billion ($773 million) mezzanine fund, Reuters reported.
Zhonghong Real Estate apparently plans to invest RMB100 million in the fund, which would provide financing for acquisitions as well as resources and property companies, the company said in an exchange filing.
CITIC Private Equity Funds Management - which is ultimately controlled by state-owned conglomerate CITIC Group - currently manages two funds, a RMB9 billion local currency vehicle and a $1 billion dollar-denominated fund.
A mezzanine fund typically provides financing to large-scale construction projects, start-up companies in growth industries and leveraged buyouts. Mezzanine capital can be structured either as debt or preferred stock, and in the event of a default, other debts will receive priority payments while the fund will generally be entitled to receive residual funds.
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