CM Venture Capital, a Chinese venture capital (VC) firm that invests in both domestic and international technology startups, is reportedly looking to set up an evergreen private markets fund.
Shanghai-headquartered CM Venture Capital will seek an initial $100 million for the CM (Carbon Mitigation) Evergreen Fund, which targets a first close by the end of Q2 2024 with capital from existing limited partners (LPs), news outlet Private Equity International (PEI) reported, citing two people with knowledge of the matter.
DealStreetAsia has reached out to CM Venture Capital for comment.
The vehicle will be CM Venture Capital’s first evergreen fund, an open-ended investment vehicle allowing investors to make long-term investments in private companies.
Unlike traditional private funds, which typically have a fixed lifespan of about 10 years, evergreen funds do not have a fixed end date. Instead, they continue indefinitely, allowing investors to enter and exit the fund periodically.
CM Evergreen Fund will primarily target institutional LPs, said the sources. This compares to other evergreen funds, most of which are geared towards individual LPs because the structure of evergreen funds typically enables investors to access private market investments with a lower minimum investment threshold.
The existing LPs of CM Venture Capital include large multinational corporations such as British American Tobacco, General Electric, Samsung, German chemicals giant BASF, and Malaysia’s state energy firm Petronas, according to its website.
The firm is still evaluating potential liquidity mechanisms for the fund. All exit proceeds, at least initially, will be reinvested, said the sources.
The firm was founded in 2010 by its now CEO Min Zhou, who was previously a principal responsible for fund-of-funds (FOF) investments at Silicon Valley Bank Capital. Her co-founder and managing partner Patrick Berbon was a former senior consultant at risk analysis and management firm Performance Improvement. They both have PhDs in materials science.
With a portfolio of companies spanning Asia, North America, and Europe, CM Venture Capital mainly targets four industries, namely new materials, energy transformation, environment & sustainability, and advanced manufacturing. Its investment scope covers a variety of sub-sectors, such as synthetic biology, advanced semiconductors, hydrogen energy infrastructure, energy storage, water treatment, and robotics, just to name a few.
CM Venture Capital has invested over $250 million to date, generating an internal rate of return (IRR) of 30%, according to its website.
Some of its recent investments include NovoNutrients, a Silicon Valley-based startup that turns carbon dioxide and green hydrogen into single-cell protein; and Chinese new energy startup Dynamic Hydrogen.
It has also backed Chinese biotech and nanotech startup Beaver; UK-based Econic Technologies, which enables manufacturers to convert waste carbon dioxide into carbon-based products; and Averatek Corporation, a US-based developer of breakthrough manufacturing processes for industries like ultra-high density printed circuit boards and semiconductor packaging.