Dah Chong Hong Holdings, a motor and consumer products distribution company in Greater China, has joined forces with Chinese conglomerate CITIC Limited to launch a $80-million fund to invest in the consumer and healthcare sectors.
Dah Chong Hong will participate as a limited partner (LP) and make a capital commitment of $35 million to the Tamar Alliance Fund. CITIC Pacific, a CITIC Ltd wholly-owned subsidiary which is also the parent company of Dah Chong Hong, will also contribute the same amount, while the holding company of the general partner, Tamar Alliance GP 1 Limited, will invest another $10 million.
The fund said it will seek out more LPs to contribute to the total commitments.
Under the agreement, Dah Chong Hong and the general partner, both indirect subsidiaries of CITIC Limited, will provide the fund with further financing of up to $5 million on a 50:50 basis to meet the funding requirements.
“The Asian market for consumer goods and healthcare products is large and growing rapidly, driven by rising demand from an increasingly affluent middle class across Greater China and Southeast Asia. It is also at the beginning of a long and rich development path,” Dah Chong Hong said in an announcement.
The establishment of the Tamar Alliance Fund, it added, will open up new revenue streams and opportunities for the company, as it enables Dah Chong Hong to capture investment returns from target companies.
Meanwhile, investee companies will gain access to the firm’s market knowledge and expertise, especially when they choose Dah Chong Hong as their distribution partner.