Cathay SITC to set up PE firm, raise $330m for first vehicle

The urban landscape of Taipei, with the Taipei 101 skyscraper in the background.

Cathay Securities Investment Trust Co (Cathay SITC) is set to become Taiwan’s first asset manager to launch a wholly owned private equity (PE) firm as it raises NT$10 billion ($330 million) for its first vehicle, according to local media reports.

Last month, Taiwan’s Financial Supervisory Commission (FSC) gave the go-ahead for securities investment trust and consulting (SITC) companies to manage and operate PE funds through a subsidiary.

Cathay SITC said it will submit an application to form the PE subsidiary to the FSC by the end of the year and expects to launch the PE firm with a registered capital of NT$50 million ($1.64 million) by the end of January next year.

Jeff Chang, chairman of Cathay SITC, will spearhead the PE unit, which has not been named yet. As chairman of Taiwan’s Securities Investment Trust and Consulting Association, he was also one of the key persons to push for this regulation’s revision in the country.

At the fund forum in Hong Kong in August, Chang said that the private equity fund approval would come at the right time as local institutional investors seek high yield offshore investment opportunities due to the low interest rate in the domestic market. Additionally, the PE firms will encourage institutional investors to pour more capital into infrastructure, utility and green industries in Taiwan.

Cathay SITC, which is the main asset manager of Cathay Life Insurance, reported total assets under management of about $17.16 billion as of June 30, 2017.

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