CCBI Healthcare Fund makes maiden investment

China’s first healthcare fund will invest RMB100m in a Chinese rubber stopper maker.

CCB International, the Hong Kong-based investment arm of Chinese commercial bank China Construction Bank, has invested RMB100 million ($15 million; €10 million) into Jiangyin Lanling Rubber Stopper Company.

Based in Jiangsu on China’s east coast, Lanling manufactures a wide range of rubber stoppers for the medical industry. The capital will be used to scale up Lanling’s production capabilities and for research and development purposes.

The investment was made out of CCBI Healthcare Fund, which is China’s first healthcare-focused fund. The fund is also China Construction Bank’s first fund denominated in RMB, according to a statement from the bank.

To date, the fund has raised RMB2.6 billion from its investors, which include Beijing-based hydroelectric company China Yangtze Power and investment firm China Jianyin Investment. It intends to raise RMB5 billion, according to media reports.

The fund focuses on the pharmaceutical products manufacturing, medical devices providers, medical institutions, medical services providers and healthcare management sectors. The fund will primarily target pre-IPO opportunities, as there are clear exit routes this way, Hu Zhanghong, CCBI’s chief executive officer, said in the statement. Over the past decade, China’s healthcare industry has grown twice as fast as the country’s gross domestic product, the statement added.

The bank plans to launch more private equity funds in “industries backed by government policies”, including a culture private equity fund and an aviation private equity fund, Hu also said in the statement.

China Construction Bank is a joint-stock commercial bank. Its investment divisions include capital businesses, commercial and personal banking. The bank has approximately 13,629 domestic and overseas branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo and Seoul.