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First EU-China investment platform backed by the Juncker Plan

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    Date: 06 August 2018

EIF supported Cathay Capital is pleased to announce that it has held a first close at EUR 600 million on its fund Cathay Midcap II, which is targeting EUR 1.2 billion. The fund is backed by Cathay’s historical cornerstone Limited Partners (LPs), China Development Bank (CDB) and Bpifrance, and a mix of sovereign funds, institutional investors and family offices. Cathay Midcap II is also the first fund invested in by the European Investment Fund (EIF) and the Silk Road Fund (SRF), which signed a Memorandum of Understanding at the EU-China Summit in Beijing in July to confirm the first co-investment under the China-EU Co-investment Fund (CECIF) programme. This programme was established by the EIF and SRF with the aim of developing synergies between the Belt and Road Initiative and the Investment Plan for Europe.

The Fund was officially launched at the beginning of this year with the signing of a tripartite Memorandum of Understanding between CDB, Bpifrance and Cathay Capital, during French President Macron’s official visit in China. Thanks to Cathay Capital’s successful investment strategy and track record, the first closing of Cathay Midcap II was completed within a few months.

Following the strategy of its predecessor fund, Cathay Midcap II will support mid-cap companies with a high potential for growth and value creation as well as a capability to expand internationally. This new investment vehicle will continue to focus on its core geographies – China, Europe (mainly France and Germany), and to a smaller extent North America. Targeted sectors will include those with high cross-border synergies between China and the West that stand out in terms of sustainable growth potential, such as healthcare, high-end industries, consumer goods and business services.

Jyrki Katainen, European Commission Vice-President, responsible for Jobs, Growth, Investment and Competitiveness, said: “We have been working towards this moment since we set up the EU-China working group in 2015 at the High Level Economic and Trade Dialogue in Beijing. I am very pleased that we are now seeing the fruits of that labour and that the Cathay Midcap fund will finance European and Chinese high potential mid-cap businesses in strategically important sectors. This is a very good example of how private and public investors can work together.”

Pier Luigi Gilibert, EIF Chief Executive, said: “This first investment under the EU China co-investment fund adds another dimension to the financing approach for small businesses in Europe. Investing in SMEs helps to grow economies and offer employment opportunities and this new partnership with Cathay Capital will be instrumental in boosting finance for European companies.”

Mingpo Cai, President and founder of Cathay Capital, said: "This new investment vehicle will leverage Cathay Capital’s expertise accumulated over the past decade to help hidden champions in their international acceleration to become world-class leaders and to create superior returns for investors. We thank our historical LPs for their continued support and trust, and welcome new LPs in joining the Cathay ecosystem."

Cathay Midcap II is expected to commence investing in the second half of 2018 and complete its final closing by the first half of 2019.

About Bpifrance

Bpifrance, the French public investment bank, has the ambition to help businesses, ranging from start-ups to medium-sized companies, and occasionally large companies, to innovate, invest, grow and export. By sharing the risks with its private and public partners, Bpifrance provides a continuum of financing, from short-term credits to equity capital.
More info: www.bpifrance.fr – Follow us on Twitter: @Bpifrance - @BpifrancePresse

About China Development Bank

China Development Bank (CDB) was founded in 1994 as a policy financial institution under the direct leadership of the State Council. It was incorporated as China Development Bank Corporation in December 2008, and officially defined by the State Council as a development finance institution in March 2015.

CDB provides medium to long-term financing facilities that serve China’s major long-term economic and social development strategies.

CDB is the world’s largest development finance institution, and the largest Chinese bank for foreign investment and financing cooperation, long-term lending and bond issuance.

About European Investment Fund

European Investment Fund is part of European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized business (SMEs) by helping them to access finance. European Investment Fund designs and develops venture and growth capital, guarantees and micro-finance instruments which specifically target this market segment. In this role, European Investment Fund fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. European Investment Fund implements the SME Window under the investment Plan for Europe.

About European Fund for Strategic Investment

The Investment Plan for Europe, the Juncker Plan, is one of the EU´s top priorities to boost investments and to create jobs and growth by removing obstacles to investment, providing visibility and technical assistance to investment projects, and making smarter use of existing and new financial resources. With guarantees from the European Fund for Strategic Investments (EFSI), the EIB and EIF are able to take on a higher share of project risk, encouraging private investors to participate in the projects. The European Parliament and Member States agreed in December 2017 to extend EFSI's duration and increase its financial capacity. As of July 2018, the Juncker Plan is set to trigger more than EUR 335 billion in investment across the EU, exceeding its original target to mobilize EUR 315 billion by July 2018.

About Silk Road Fund

Silk Road Fund is a market-oriented, international and professional medium to long-term development and investment institution. It invests in a broad spectrum of sectors under the framework of the “Belt and Road” initiative including infrastructure, energy resources, industrial capacity cooperation and financial cooperation.

About Cathay Capital

Cathay Capital Private Equity is a leading international private equity firm focused on cross-border investment and committed to supporting the international expansion of middle-market companies in North America, China and Europe. The firm's team of over 70 professionals is based in New York, Shanghai, Beijing, Paris, Munich, San Francisco and Tel Aviv and leverages its unique business model and platform to create value for companies across three continents. With $2.5 billion in assets under management, Cathay Capital Private Equity has completed over 90 buyouts and growth capital investments across three continents since its inception in 2007. Cathay Capital Private Equity invests in and assists middle-market companies in the consumer goods and services, healthcare, business services and technology industries.

Press Contact

Cathay Capital
Yoann Besse,
Citigate Dewe Rogerson
yoann.besse@citigatedewerogerson.com
Tel: +33 (0)1 53 32 78 89 / +33 (0)6 63 03 84 91

EIF:
David Yormesor
d.yormesor@eif.org
Tel: +352 42 66 88 346


 
 

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