Cathay holds final close on USD 270m for PE growth fund

Ero Partsakoulaki
30 June 2023

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France-based Cathay Capital Private Equity has held a final close on USD 270m (EUR 240m) for its latest growth private equity (PE) fund, Small Cap IV, to invest in healthcare, consumer and technology companies across Europe, North America and Asia.

The new fund is an expansion of Cathay Capital's middle market strategy and brings its assets under management to USD 5.5bn, according to a press release.

In addition to Europe and Asia, the new growth PE fund's geographic coverage will include North America for the first time, it said. The addition of North America to the strategy builds on the firm's activity in the market, notably in healthcare and consumer sectors, and will include supporting local SMEs with their expansion into domestic and international markets.

Cathay Small Cap IV held a first close in March 2021 on EUR 155m (USD 168m) and had raised EUR 230m as of September 2022, Unquote reported.

The fund had a target in the EUR 250m-EUR 350m range and was expected at the time to hold a final close in early 2023. The GP was aiming to deploy the fund entirely by 2024, with 4-5 deals completed each year, as previously reported.

Alongside its private equity strategy, the firm launched a EUR 500m venture and growth fund in May 2022 that will invest at the intersection of healthcare, life sciences and technology, as reported.

Investors
The fund is backed by existing and new global investors comprising sovereign wealth funds, institutional investors, corporates and family offices, it said.

Investments
The fund plans support companies through scale-up strategies, international expansion and digitalisation, targeting control and minority investments in 15-20 healthcare, consumer, software and technology companies, with equity tickets of USD 15m-USD 25m.

The GP has already completed six investments from the new fund, including AD Education, a France-based provider of education in creative fields; and Snocks, a Germany-based digital direct-to-consumer apparel brand.

Cathay has made more than 250 investments in verticals including healthcare, technology, and consumer from its offices in Paris, New York, San Francisco, Munich, Berlin, Shanghai, Beijing, Shenzhen, and Singapore.

Most recently, the GP realised its investment in The Independents Group (TIG), a French group of agencies for luxury and lifestyle that it acquired in 2002 via its via its Sino-French SME Fund and Cathay Capital III fund. The company secured USD 400m in an investment round led by FL Entertainment, a French content producer sports betting platform company and PE firm TowerBrook.

People
Cathay Capital − Mark Woods (partner and Head of North American Private Equity), Fabien Wesse (managing Partner and Head of Small Cap).