Global investment firm Cathay Capital has secured the first close of its second RMB-denominated growth fund at over 1.6 billion yuan (almost $240 million), while it targets 3 billion yuan ($447.6 million) for the final closing, the firm announced on Thursday.
Cathay Growth RMB Fund II is backed by cornerstone investors Valeo, a publicly-listed automotive supplier based in France, and the French container shipping line CMA CGM.
Major limited partners (LPs) from its predecessor fund committed to the new vehicle. This includes Taikang Life Insurance, Xiamen C&D Inc, Ancheng Capital, Quanzhou Financial Holding Group, and Suzhou Fund, a fund of funds (FoF) in Suzhou.
Cathay Capital is based in Suzhou City in the eastern Chinese coastal province of Jiangsu.
The new fund will be double the size of the Cathay Growth RMB Fund I — a 2020 vintage vehicle that raised 1.5 billion yuan ($223.7 million) in capital commitments.
Fund II will give more emphasis on investing in growth- and mature-stage companies with a focus on healthcare, mass consumption, and the development of industrial technologies to help achieve China’s 2060 carbon-neutral goal. It will also invest in a select group of early-stage deals and buyout transactions that can achieve synergies leveraging Cathay Capital’s resources.
Cathay’s other RMB funds
Besides the growth RMB fund series, Cathay Capital also manages other RMB funds including Cathay Smart Energy Fund, which hit its first closing at 820 million yuan ($122.4 million) in 2020 with a target to raise 1 billion yuan ($149.2 million) in total.
Its first RMB fund, Cathay CarTech Fund, was set up in 2017 to help French industrial enterprises such as Valeo, CMA CGM, industrial gases supplier Air Liquide, and energy and petroleum firm TotalEnergies explore advanced technologies and their applications in the Chinese market. The 1.5-billion-yuan Cathay CarTech Fund had a mandate to invest in China’s automotive industry with China’s Yangtze River Industry Fund among its cornerstone investors.
In China, where it has offices across Beijing, Shanghai, and Shenzhen, Cathay Capital invests across all funding stages from seed and angel to pre-initial public offering (IPO). It primarily focuses on the fields of consumer, industrial, energy, healthcare, and advanced technology.
Its Chinese portfolio companies include US-listed e-commerce platform Pinduoduo, General Motors, and Toyota Motor-backed autonomous driving startup Momenta, fitness mirror maker Fiture, beverage brand Genki Forest, and JD Logistics, the logistics arm of e-commerce giant JD.com.
Founded in 2006, Cathay Capital has booked over 5 billion euros ($5.3 billion) in cumulative assets under management (AUM) with investments in more than 230 enterprises worldwide.
Its most recent fund was the 500-million-euro ($532.8 million) Cathay Health, a global fund dedicated to investing in healthcare, life sciences, and technology. In May, Cathay Capital launched Cathay Health, a 500-million-euro ($533.4 million) global fund dedicated to investing in the convergence of healthcare, life sciences, and technology.