Cathay Capital is to launch a new investment vehicle aimed at promoting growth and international development of French, Chinese and European companies in the mid-cap segment – the Sino French (Midcap) Fund.
This new fund marks a new step in the cooperation between France and China for private equity investment.
It follows and builds on the success of the Sino French Fund for SMEs, created by Bpifrance and China Development Bank in September 2012 and managed by Cathay Capital.
The Sino French (Midcap) Fund will focus its investments on mid-cap companies in France and China, as well as within the rest of Europe, with a particular emphasis on the German Mittelstand. It is designed to foster Sino-French and Sino-European cooperation by helping the development of these countries’ mid-cap companies, which play a vital role in growth and job creation. It will invest through both significant minority positions and stakes that may be majority.
Bpifrance and China Development Bank plan to act as cornerstone investors in the Sino French (Midcap) Fund and could contribute as much as EUR100m each.
This new fund, which will be marketed to other investors under the name of Cathay Midcap Growth Fund III, targets a size of EUR500m and has the support of Cathay Capital’s historical LPs, international institutional investors and family offices.
Nicolas Dufourcq, chairman of Bpifrance says: “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. This first fund has stimulated the development of small-cap companies in France and China, while gaining recognition from the governments of both countries. We are very happy to be working to establish this new fund with our partner CDB.”
Huaibang Hu, president of China Development says: “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. Chinese companies will learn from advanced know-how to improve their practices. It is a win-win situation. The Sino French (Midcap) Fund will help us stengthen the links between the two continents.”
Mingpo Cai, president of Cathay Capital Private Equity, says: “The launch of this new fund builds on our eight-year experience in cross-border investment between China and Europe. Over recent years, Cathay Capital’s multicultural team has grown to 30 people, including 6 partners, and offices in Paris, Shanghai, Beijing, and New York. We thank Bpifrance and CDB, along with our historical investors, for their continued strong support. We will continue to work hard to deserve this trust and the confidence of new investors.”
