CPE backs Adamas China credit fund, first close expected by end of August

A final close is expected within 12 months.

The fund targets high-return investments in small- to medium- sized enterprises (SMEs) in Greater China across sectors such as agriculture, natural resources, clean energy, consumer opportunities and healthcare.

It predecessor - Asian Private Credit Fund - launched in March 2010 and has so far exited four of its 11 investments, yielding a gross IRR of 27%, with three more exits in the pipeline.

Adamas was set up in 2009 as Gen2Partners before being rebranded in May this year to reflect the firm's decision to shift focus to its core businesses of private investments and customised funds. The Hong Kong-based firm typically makes pre-IPO investments offering mezzanine debt and bridge loans.

"We believe there is a growing appetite for credit funds. Historically in China most funds have been equity-based but now even PE funds are finding the credit space compelling," Barry Lau, managing partner at Adamas told AVCJ. "You can get risk-adjusted returns north of 25% IRR, hard assets as collatoral and, with the banks not lending, you are able to command terms you are usually not able to get." 

Last November CPE, an AIM-listed vehicle, announced plans to develop a strategic partnership with Adamas combining the firms capabilities in China investment and risk management with CPE's specialist operational private equity experience and involvement with investee companies.

Accordng to a release, CPE also has plans for a seven-year $20 million co-investment programme with Adamas, targeting income-generating assets in Greater China. 

"Our decision to invest US$1 million in Adamas's new fund is a strong example of the long-term benefits we expect to realise from our agreement to develop a strategic partnership," said John Croft, chairman at CPE. 

 

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• Topics
• Financing
• Fundraising
• Mezzanine
• Greater China
• Mezzanine
• China
• Fundraising
• Adamas Asset Management