Cathay Capital launches €500,000 PE research fund

The French-Chinese PE firm has donated funds to Chinese business school CEIBS to finance PE research.

Cathay Capital Private Equity has donated €500,000 to Shanghai-based business school CEIBS to establish the Cathay Global PE Research Fund.

The initiative, created by Cathay Capital and CEIBS and a selection of other business schools, aims to promote the study of PE trends, models and case studies, as well as innovation in organisational structures and management, Cathay Capital said in a statement.

Faculties from the involved institutions will be able to apply to the fund for research funding.

Cathay Capital, which is based in Paris and Shanghai, was founded by CEIBS alumnus Ming Po Cai.

The announcement of the research fund accompanied the launch of the Sino French Innovation Fund. CDB Capital, the investment arm of China Development Bank, and France’s Bpifrance, a subsidiary of the Caisse des Dépôts Group, are cornerstone investors in the venture capital fund, which has a €250 million target and is managed by Cathay Capital.

French automotive supplier Valeo is also an investor in the fund and will help Cathay access investments in smart transportation start-ups and car applications, the statement said.

The fund will make cross border investments in France, China and the US targeting digital start-ups, including mobile, data, transportation, marketing, software, cloud technologies and media businesses related to the internet. It aims to make 12 to 18 investments of €5 million-€25 million.

Denis Barrier has joined Cathay Capital as co-founder and managing partner of the Sino French Innovation Fund. Barrier is a partner at US-based venture capital firm Iris Capital, according to his LinkedIn profile, and was previously head of capital and corporate venture at Orange Group.

The new fund follows the Sino French Fund launched in 2012 focused on small and medium sized enterprises, and the Sino French (Midcap) Fund launched in 2014, in which CDB Capital and Bpifrance are also investors.

Cathay Capital is currently investing through its second fund, a €187 million 2011 vehicle that it is investing alongside the Sino-French SME fund, according to PEI’s Research & Analytics Division.

During the Chinese prime minister’s visit to France in July, CDB Capital and Bpifrance signed investment agreements with Cathay Capital for the Sino French Innovation Fund, the statement noted.

During the same visit, French private equity firm Idinvest launched a €1 billion platform funded by Chinese investors, including the China Merchant Bank, CIIC and the Shanghai Shentong Metro, as reported by Private Equity International.

The Chance platform, which expects to hold its first close by the end of the year at €300 million, will target minority investments in French and European businesses.