Cathay Capital launches $687m Sino-French Fund
Cathay Capital, a Sino-French private equity firm, has launched a EUR500 million ($687 million) fund to promote the international expansion of French and Chinese companies in the mid-cap segment.
China Development Bank (CDB) and Bpifrance, a subsidiary of French state-owned bank Caisse des Dépôts, will each contribute EUR100 million.
The new vehicle, Cathay Midcap Growth Fund III, will also invest within the rest of Europe, particularly in German Mittelstand, with a view to supporting economic growth and creating new jobs.
"Midcap companies represent a very promising segment, with opportunities for firms in France and China. French companies, especially those in the lifestyle, industrial and technology sectors, will gain from increased exposure to the growing consumption market in China," said Huaibang Hu, CDB's president.
The fund, which will invest through both significant minority and majority stakes, is expected to reach a first close in June.
This is not the first time CDB and Caisse des Dépôts have formed a Sino-French Fund. In September 2012, two parties created a EUR150 million vehicle to invest in cross-border small- and medium-sized enterprise (SMEs). It is also managed by Cathay Capital.
"This new step is a logical one since we are very satisfied with the results of our first joint fund, the Sino French Fund for SMEs, which has already made several investments and successfully completed one exit so far," said Nicolas Dufourcq, Chairman of Bpifrance.
Founded by 2006, Cathay Capital has invested a total of EUR70 million in 18 companies over the last three years via its debut fund. It is now investing through its second fund - Cathay Capital II - and the Sino-French fund for SMEs. The PE firm has more than EUR420 in assets under management.
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