CDH Fund IV heavily over-subscribed

The China-focused firm will soon close a $1.4bn fund, but sources say it could have raised double that amount.

CDH Investments has wrapped up its fundraising for CDH Fund IV, with subscriptions exceeding the fund’s $1.4 billion hard cap, two sources told sister news site PEI Asia.

The firm could “easily have raised a fund twice that [$1.4 billion] amount”, one source said. However, under pressure from the fund's lead investors, CDH agreed to cap the fund's size at $1.4 billion, the second source added.

CDH declined to comment.

The firm was originally targeting commitments of $2 billion for the fund, but lowered its target sometime last year owing to a difficult fundraising environment.

CDH had raised more than $1 billion for Fund IV as of 31 December 2009 and is expected to complete its final close in the first quarter of 2010, both sources said.

CDH China Fund III closed on $1.6 billion, while the firm’s first and second growth capital funds raised $103 million and $310 million respectively. CDH also manages two venture capital funds, the first of which closed on $200 million in 2006, while details pertaining to the second fund are not known.

In 2008, the firm began raising capital for an RMB-denominated fund, reportedly targeting commitments of RMB5 billion ($732 million; €504.6 million), and counts China’s National Social Security Fund as one of its limited partners.

Limited partners in previous US-dollar denominated funds raised by CDH include UK government-backed CDC Group, the Government of Singapore Investment Corporation, International Finance Corporation and Hong Kong-based fund of funds manager Asia Alternatives.

Established in 2002, CDH managed $3 billion across private equity, venture capital and long/short public equity as of April 2009. The firm is among the nominees for private equity firm of the year in China in the 2009 PEI Awards, a title it won in 2008.