Cathay Capital raises $865m for second mid-market PE fund

Commercial buildings including the China Central Television (CCTV) Headquarters, center, stand in the central business district of Beijing. Photographer: Tomohiro Ohsumi/Bloomberg

Cross-border private equity firm Cathay Capital Private Equity announced on Thursday the final close of its second Sino-European Mid Cap Fund at €800 million ($865 million).

It comes close on the heels of Cathay Innovation, a venture capital affiliate of the firm, raising $550 million for its second global vehicle, Cathay Innovation Fund II.

With Cathay Innovation Fund II covering startup investments, Sino-European Mid Cap Fund II will primarily enable the company to capture opportunities in small and medium-sized enterprises (SMEs) and economically targeted investments (ETIs), according to a company statement.

Geographically, the second mid-cap fund will invest in regions where Cathay currently operates, including Europe, Asia and North America with focuses on countries such as France, Germany, Spain, China, as well as Singapore, where the company recently opened its first Southeast Asia office.

The middle-market vehicle will finance companies “that present significant development opportunities and stand out for their sustainable growth potential” in the fields of healthcare, innovative technology, new consumption, education, and digital services, said the company. Its website indicates that the fund typically injects between €25 million ($27 million) and €75 million ($81 million) in each equity investment.

Cathay, which had initially targeted to collect €1.2 billion ($1.30 billion) for the second fund, announced its first close at €600 million ($648 million) in July 2018.

The first close was backed by limited partners (LPs) including Chinese government-owned China Development Bank (CDB), China’s Silk Road Fund (SRF), which was launched to invest in countries along Beijing’s Belt and Road Initiative, French investment bank Bpifrance, EU’s European Investment Fund (EIF), and a mix of sovereign wealth funds, institutional investors and family offices.

Its predecessor fund, Sino-European Mid Cap Fund I, was closed at €500 million ($541 million).

Cathay’s middle-market fund series was created in 2014 between Beijing and Paris as a joint effort to promote the economy and technological development of the two countries through private equity investments.

It has backed Echosens, a Paris-based firm which offers the FibroScan family of products for assessment of chronic liver disease; Datawords; Chinese e-commerce giant JD.com’s unit JD Logistics; Shanghai-listed biotech firm CABIO Biotech; and New York-listed OneSmart International Education Group, among others.

Established in 2007, Cathay has completed over 140 buyouts, growth and venture capital investments and now manages €3.5 billion ($3.78 billion) in total assets. The company has nearly 100 employees based in Paris, Shanghai, Beijing, New York, San Francisco, Munich, Tel Aviv, and Singapore.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.