CP Eaton launches new RMB platform

At the NSSF, Gu oversaw the fund’s overseas alternatives strategy and was involved in GP manager selection. He will report to Jingjing Bai, head of the Shanghai office. “The Chinese investment market is undergoing a rapid transformation and institutionalization process,” Gu said. “This represents an incredible opportunity to bring investors and investments together.”

David M. Love, CP Eaton’s lead in Asia Pacific, stated, “We are the first among global placement agencies to launch an RMB fundraising platform, just as we were the first placement agent to open a representative office in the PRC.” CP Eaton stressed the significance of the anticipated strengthening of the RMB against the US dollar as well as the potential growth of the RMB fund market as key drivers for the expansion. According to CP Eaton, the new initiative is designed for both Western and PRC domestic fund managers.

Speaking to AVCJ, Love pointed out CP Eaton’s choice of Shanghai as its base as the first leading Western placement agent to make China its Asian headquarters. The city has become the launch pad for PRC initiatives to bring international investors into the RMB fund space.

“Shanghai clearly will evolve into a global financial center and is a leader in the developing RMB market, so we are pleased we were the first placement agent to open a representative office there,” Love told AVCJ. However, he added, the movement of international capital into the RMB space, “is unlikely to be an early initiative, but we will monitor developments on that front carefully.”

At the end of March, Shanghai announced a “Trial Plan for the Participation of Foreign Investment in Renminbi Investment Funds,” to be based in the city’s Pudong New Area, aiming initially to support RMB funds founded in the area and invested in by outside investors. Love noted that CP Eaton was monitoring and observing regulatory developments around the RMB fund proposition. “We are interested observers, not active participants, in the developing rules and regulations influencing the RMB market.”

According to AVCJ sources, placement agents like CP Eaton and other advisory firms are likely to be important in the early development of the RMB fund space in institutionalizing and maturing the ecosystem. Many PRC LPs, sources believe, will be coming to the RMB fund market with relatively underdeveloped internal capabilities in terms of understanding and realizing maximum value from private equity investments, and third-party advisors and intermediaries will serve to make up for this initial deficiency. It is significant that CP Eaton is launching the RMB platform with a focus on its GP clients, who may be seeking to tap Chinese LPs; rather than beginning with a tilt towards Chinese and international LP support.

CP Eaton’s RMB fund initiative, “is exploratory at this point, but we think it has interesting multi-level potential over the longer term,” Love concluded. 

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• Topics
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• Greater China
• Renminbi fund
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