Chinese private equity firm CDH Investment closes on US$2b fund
Mainland private equity company's success in raising capital comes at a time when the industry struggles to exit investments via IPOs
CDH Investments, one of the largest homegrown mainland private equity firms, is a few months from completing fundraising for its US$2 billion fifth fund.
The success of the fund comes at the time when the deal-making industry struggles to exit investments through initial public offerings.
Founded in 2002, CDH Investments, a spin-off unit of Beijing-based investment bank CICC, manages about US$8 billion in assets.
It aims to use the freshly raised proceeds from the latest fund for investments in "growth, buyout and consolidation opportunities in health care, consumer and financial services", according to people with direct knowledge of the matter, who declined to be named because the fund is still going through the marketing process.
Apart from raising funds from existing investors, much of the new money comes from an influx of Asia and US-based institutional investors who are willing to take a lock-up period of 10 years, reflecting their commitment to China's growth story, they added.
[It will invest in] opportunities in health care, consumer and financial services
With the door to cashing out in China's listing market remaining largely shut, only a few international and well-connected domestic funds, including KKR and the Lenovo-backed Hony Capital, are able to raise fresh capital in order to exploit the opportunities available.