CEC to raise $300m China fund
Hong Kong-based private equity firm China Enterprise Capital Management (CEC) is said to be planning to raise up to $300 million for a third fund which will focus on consumer deals in mainland China.
The vehicle will target $200-300 million of capital from LPs, CEC director Peter Lo told Asian Investor. It will succeed the $120 million CEC Ltd fund, which closed in 2006 and is fully invested, and the China Enterprise Development Fund (CEDF), which closed at $40 million in 1998.
CEC Ltd's investments have included Hong Kong-listed clothing distributor China Outfitters and mining firm Asia Coal, while CEDF counted beer producer and wholesaler Harbin Brewery among its portfolio companies and reaped an overall IRR of around 25%.
The investors in CEC's existing funds are principally US-based endowments, family offices and institutional investors, although some LPs hail from Europe, including several high-net-worth individuals. Only 3-5% come from Asia.
"Most of the entrepreneurs or the companies in China are looking for a partner. They are not looking for money," said Lo. "Private equity is not all-mighty. They can only add on something that a company needs for its future development." He adds that CEC will use its network of backers and other contacts to add value to its investee companies.
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