Cathay launches $239m China smart energy fund
Cathay Capital Private Equity has launched a fund with a targeted corpus of RMB1.5 billion ($239 million) for investment in emerging technologies and business models in the Chinese energy sector.
It is the China-Europe cross-border firm’s second RMB industry vehicle, following the launch of the Cathay CarTech Fund in December. The new fund will be backed by France-based energy giant Total and Hubei High Technology Investment Guiding Fund Management, a Chinese provincial government financial platform. Both partners will contribute around RMB300 million each.
The fund is being positioned as an accelerator of environmental and sustainable industrial development in the context of an emerging “new energy” market characterized by cleaner and more efficient power production as well as evolving supervisions systems and consumer behaviors. Targeted segments will include energy internet, energy storage, distributed energy, smart energy, low-carbon activities, and renewable energy.
“Through this investment, we are delighted to become a part of the innovation ecosystem of the Chinese energy sector, benefiting from the knowledge of the Chinese market that Cathay Capital brings to us,” Patrick Pouyanne, chairman and CEO of Total, said in a statement, describing China as a global energy technology leader. “We believe that it represents a significant growth and innovation potential in areas of new energies and sustainable development and resonates with Total’s ambition to become the responsible energy major.”
Total is investing via its VC arm Total Energy Ventures, which invests a range of fields including digital energy, internet-of-things, and sustainable transportation. It contributed EUR10 million ($12.4 million) to Cathay’s Sino-French Innovation Fund, which was launched in 2015 with cornerstone investments from China Development Bank and French state-owned bank Caisse des Depots, and a target corpus of EUR200-250 million.
Founded in 2006, Cathay focuses on cross-border middle-market investment with a number of funds mandated across China, Europe, and North America. It maintains bases in Shanghai, Beijing, Paris, Munich, New York, and San Francisco. Earlier this month, the firm made an investment of undisclosed size in Chinese automotive technology specialist Benewake.
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