Cathay Capital raises $262m for fourth small-cap fund
Cathay Capital Private Equity has closed its fourth small-cap fund - which will make investments across Asia, North America, and Europe - on EUR 240m (USD 262m). It takes the firm's total assets under management (AUM) past EUR 5bn.
The new fund will invest in 12-15 companies in healthcare, software, consumer and education, writing cheques of EUR 15m-EUR 30m. Seven investments have been completed to date, including Chowsing, a China-based manufacturer of pet food and nutrition products.
There will be a focus on sustainable transformation, according to a statement. The investment team will not only filter companies compliant with the environment, social, and governance (ESG) standards during the selection process, but it will also set and track tailored objectives for each business to embed responsible and sustainable business practices into daily operations.
"Private equity has a much greater purpose beyond profit. Over the years, it's become clear that ESG matters and economic value go hand in hand as the financial success of a company is closely correlated to the impact it has on its immediate environment, populations and the planet," said Mingpao Cai, the firm's founder and chairman.
It is the first Cathay private equity fund to be classified under Article 8 of the Sustainable Finance Disclosure Regulation (SFDR), which means it promotes environmental or social characteristics. The firm's latest innovation and healthcare funds already enjoy this classification.
Founded in 2007 as a Sino-French manager, Cathay has completed more than 260 investments to date and broadened its scope considerably. Asia activities are coordinated out of offices in Shanghai, Beijing, Shenzhen, and Singapore.
The firm closed its second innovation fund on EUR 650m in 2021 and a third launched last year with a target of EUR 1bn. A global healthcare fund also entered the market in 2022, seeking EUR 500m.
Cathay entered the renminbi-denominated fund space in 2017, raising dedicated vehicles for car technology and smart energy in conjunction with strategic partners. Growth funds followed; the second of these reached a first close of CNY 1.6bn (USD 241m) last year against an overall target of CNY 3bn.
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