Cathay reaches $700m first close on Sino-European fund
Cathay Capital Private Equity has reached a first close of EUR600 million ($702 million) for its latest middle-market Sino-European fund. The target is EUR1.2 billion.
Cathay Midcap II is backed by China Development Bank, Bpifrance, and a mix of sovereign funds, institutional investors, and family offices. It is also the first fund backed by the China-EU Co-investment Fund, which was established by the European Investment Fund and the Silk Road Fund to support China’s One Belt One Road infrastructure initiative.
Midcap II was launched earlier this year during French President Emmanuel Macron’s official visit to China and is expected to begin investing in the second half of 2018 before reaching a final close by the first half of 2019. The vehicle’s predecessor, Sino-French Midcap Fund, reached a final close of EUR500 million in late 2014 after less than a year in the market.
Cathay describes its target sectors as those with high cross-border synergies between China and the West that stand out in terms of sustainable growth potential. Investments are expected to cover healthcare, consumer goods, and business services. The core geographies are China, France, and Germany, while a small allocation will be considered for North America.
"This new investment vehicle will leverage Cathay Capital’s expertise accumulated over the past decade to help hidden champions in their international acceleration to become world-class leaders and to create superior returns for investors,” Mingpo Cai, president and founder of Cathay, said in a statement.
Established in 2006, Cathay has completed more than 90 buyouts and growth capital investments via a number of funds mandated across China, Europe, and North America. The firm, which operates out of bases in Shanghai, Beijing, Paris, Munich, New York, Tel Aviv, and San Francisco, currently claims to have $2.5 billion in assets under management.
Recent fundraising activity includes the closure of Cathay’s first venture capital vehicle at $320 million and the launch of an RMB1.5 billion ($225 million) fund focused exclusively on advanced mobility technologies such as autonomous driving and internet-connected cars. In March, the firm launched an RMB1.5 billion fund that will invest technology supporting China’s energy sector.
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