Global investment firm Cathay Capital has secured the final close of its Consumer Co-Creation Fund, a fund dedicated to invest in and incubate early-stage Chinese consumer goods and retail firms with high growth potential.
While the Paris-headquartered investment firm did not divulge the size of the final close, the fund has roped in some of France’s largest corporations, including luxury conglomerate Kering; cosmetics giant L’Oréal; pharmaceutical firm Sanofi and Pernod Ricard, the world’s second largest wine and spirit company; among some of its limited partners, the firm said on its official WeChat account.
Nasdaq-listed Chinese online discount retailer for brands Vipshop, Hong Kong-listed conglomerate Swire Group, and two state-affiliated investors, including Xiamen Financial Investment Group and Tongan State-Owned Capital Holding, also participated, per the release.
Founded in 2007, the firm manages over $5.5 billion in assets as of June 29. With offices in New York, San Francisco, Munich, Berlin, Shanghai, Beijing, Shenzhen, and Singapore, it has since made over 260 buyouts and growth and venture capital investments, according to its website.
The news comes over two years after the fund announced its first close in July 2021, a time when the consumer and retail industry was hit by the country’s stringent zero-COVID policy.
With the strict COVID-19 restrictions being dismantled last December, Daniel Zipser, senior partner in the Greater China office of global management consulting firm McKinsey & Company, said in an blogpost that despite “encouraging” macroeconomic and consumption signs in the first half of 2023, China’s consumption is unlikely to book a “substantial surge” in the near time.
“Despite these headwinds, however, our medium- term outlook on China’s consumption remains positive. The latest simulation from the McKinsey Global Institute (MGI) suggests an additional 50-plus million households may reach the upper-middle-class by 2025, forming the majority of urban households. This demographic has been fuelling consumption growth and is leading an increasingly consumption-driven economy,” he added in the blogpost.