BPI, CDB and Cathay launch new Franco-Chinese fund

The fund expects to hold its first close in June this year.

The vehicle follows on from the €150m Sino French Fund for SMEs, which was established by BPI and CDB in September 2012 and managed by Cathay. The firm made its first investment from the fund in March last year, investing €5m in French sealing solutions provider Flexitallic.

Franco-Chinese private equity firm Cathay has raised two other funds besides the previous Sino French Fund: Cathay Capital I and II.

The former was a €70m fund launched in 2007 that invested in 18 French and Chinese companies over three and a half years. The latter raised €190m, having launched in July 2011.

Investors
BPI and CDB are acting as cornerstone investors for the fund and plan on providing up to €100m each to the vehicle.

Cathay's existing LP base, which includes both institutional investors and family offices, will also subscribe to the fund.

Investments
The fund will focus its investment efforts on mid-cap companies based in France and China, though the vehicle will also consider investments in the rest of Europe, particularly in the German Mittelstand.

The aim of the fund is to improve Sino-French and Sino-European cooperation. Cathay typically provides equity tickets of €10-30m in mid-cap Chinese and French companies. The fund will make investments in exchange for significant minority stakes and occasionally majority stakes.

French companies within the lifestyle, industrial and technology sectors will be a focus for the vehicle, due to the opportunity for increased exposure in China's consumption market.

People
Mingpo Cai is the president of Cathay. Nicolas Dufourcq is the chairman of BPI, while Huaibang Hu is the president of CDB.

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