Official launch of the Sino French (Midcap) Fund
May 4, 2020
The Sino French (Midcap) Fund has been inaugurated on June 27th during an official launch ceremony taking place in the offices of Bpifrance. This follows the signing in March this year, during the state visit of the Chinese President to France, of an agreement between cornerstone investors Bpifrance and CDB Capital alongside Cathay Capital, who will manage the fund. On this occasion, the fund announces a successful first closing of 460 million Euros, an amount already raised situated well above the fund’s initial objective and in line with the goal for its final closing of 500 million Euros.
This midcap fund, a new step in the Sino-French relationship for private-equity investment, aims to stimulate the growth and international expansion of French, Chinese and European companies of the midcap segment, with a particular focus on the German Mittelstand. It follows and builds on the success of the Sino French Fund for SMEs, created by Bpifrance and CDB Capital in September 2012 and managed by Cathay Capital. This €150m SME fund has already accompanied a range of companies across various sectors in France and China by fostering their growth and supporting employment within this market segment.
These investments include, in France, the Flexitallic group and Hologram Industries, world leaders in sealing solutions for high-tech industries and optical and digital high-security solutions respectively. In China, the Sino French Fund for SMEs took stakes in the provider of preventive healthcare check-up services Meinian Onehealth as well as the logistic and supply chain service provider ZM Logistics.
Compared to the small cap fund, the new Sino French (Midcap) Fund will invest more significant amounts in larger companies through significant minority stakes and occasionally through majority positions. Already backed by Bpifrance and China Development Bank, who are contributing as much as 100 million Euros each, the fund – which is being marketed to other external investors under the name Cathay Midcap Growth Fund III – has gathered 460 million Euros for its first closing. The fund raising process has also attracted Cathay Capital’s historical LPs, international institutional investors, entrepreneurs and family offices.
Nicolas Dufourcq, Chairman of Bpifrance: “We are delighted to host the launch ceremony of this new midcap fund, an undertaking which marks an important step forward in our ongoing collaboration with CDB Capital and Cathay Capital in long-term development of French and Chinese companies. On the back of the successful results of our first joint fund, the Sino French Fund for SMEs, which has already made several investments, we are confident that the new vehicle can continue this dynamic in the mid-cap segment, essential for the creation of employment in today’s economy.”
Haibin Fan, President of China Development Bank: “This midcap fund launch will consolidate our existing partnership with Bpifrance and Cathay Capital. It heralds a significant new phase for Franco-Chinese cooperation in the area of private equity investment, especially in midcap companies, which we feel is a particularly promising segment presenting numerous opportunities. In this way, Chinese companies will be able to benefit from advanced technological expertise which are well-developed in France, while, in turn, French companies will gain from increased exposure to booming Chinese consumption market, especially within certain sectors (lifestyle, industry, technology).”
Mingpo Cai, President of Cathay Capital Private Equity concludes: “We are pleased to celebrate the official launch of this new midcap fund with our partners Bpifrance and CDB Capital, whom we wish to thank for their continued support. This new initiative, which will help to deepen and develop our collaboration after the success of our joint SME fund, attests to Cathay’s recognised investment expertise, which is founded on our 8 years of experience in cross-border investment between China and Europe. We will endeavour to continue to serve our partners and investors, old as well as new, in order to reward the confidence they place in us.”
Yoann Besse – [email protected] – Tel : +33 (0)1 53 32 78 89 / +33 (0)6 63 03 84 91
About Cathay Capital PE
A fund by entrepreneurs for entrepreneurs, Cathay Capital Private Equity, founded in 2006 by Mingpo Cai and Edouard Moinet, is the first independent Chinese-French private equity firm approved by the AMF (the French Financial Market Authority) and is the leader in the field of Franco-Chinese SMEs. With a double-presence in Paris and Shanghai, Cathay Capital puts itself at the service of companies that it helps with their international expansion, especially in France and China.
After an initial fund, Cathay Capital I, of €70 million invested in 18 companies over 3 years, Cathay Capital is now investing through its second fund, Cathay Capital II, and the Sino-French fund for SMEs. After the launch of Sino-French (Midcap) Fund, Cathay Capital has more than €900 million Euros in assets under management.
Bpifrance is a subsidiary of the Caisse des Dépôts bank and of the French state. It is a trusted partner to entrepreneurs, and supports businesses from start-up through to stock market flotation by providing loans, guarantees and equity. Bpifrance also provides enhanced support and backing for innovation, export, and external growth in partnership with UBIFRANCE and Coface.
Bpifrance is the outcome of the merger of OSEO, CDC Entreprises, FSI, and FSI Régions. It provides businesses with a continuum of finance at each key stage of their growth, with a range of services suited to regional specifics.
With 42 regional offices (90% of decisions are taken in the region), Bpifrance is a force for business competitiveness serving the interests of entrepreneurs. Bpifrance acts in support of state and regional policies to meet three objectives:
- to promote regional economic development
- to play its part in France’s industrial renewal
- to foster tomorrow’s leading corporations.
In Bpifrance, businesses find a powerful voice, at their side and effective, to meet all their financing, innovation and investment needs.
www.bpifrance.fr – Follow us on Twitter: @bpifrance
About CDB Capital
China Development Bank Capital Co., Ltd. (“CDB Capital”) was established by CDB in accordance with its commercial transformation plan as approved by the State Council. With registered capital of RMB 50 billion, CDB Capital is the only large-scale entity in China’s banking industry approved to make RMB equity investments. It has formed an integrated platform for strategic investments both domestically and internationally. Its activities include urban development funding, funds investment, overseas investment and industry-specific investment.
As the earliest participant in equity funds in China, CDB has participated in the creation of China’s largest portfolio of equity funds, whether measured by number, capital or diversity. With more than 15 years’ experience in investment fund management, CDB Capital has invested in and managed 20 funds. These include several strategically-significant bilateral/multilateral Chinese-foreign funds. CDB Capital has also managed some premium domestic private equity funds, and initiated China’s first National private equity fund of funds in 2010. CDB Capital has not only served to implement state strategies and industrial development, but also played a pioneering role in the development of China’s equity funds.