Private Equity News & Analysis

CDH holds first close on China fund

The Hong Kong-based private equity fund has raised over $1bn in commitments and has pulled in a number of key LPs.

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CDH Investments has made a first close on its latest $2 billion China-focused vehicle, sources with direct knowledge of the matter revealed to Private Equity International. The close officially happened on 8 February – just before Chinese New Year 2013. 

A spokesman for CDH said the firm declines to comment on fundraising matters. 

The first close was on $1 billion, although the firm has, to date, garnered commitments of over $1 billion, PEI's source said, adding that the fund’s investors include the Government of Singapore Investment Corporation, Asia Alternatives and LGT Capital Partners.

In late January, CDH filed a Form D with the US Securities and Exchange Commission, indicating an intention to raise capital from US-based LPs, PEI reported earlier. 

CDH China Fund V was launched in September 2012 and is the firm’s largest vehicle to date. Its predecessor totaled around $1.46 billion, according to PEI’s data division. LPs in its previous fund included the Canada Pension Plan Investment Board, CDC Group and the Washington State Investment Board. 

“Their target is still $2 billion so they still have a while to go, but it sounds like it will probably go above $2 billion although it may take a longer time,” an Asia-based placement agent said. Media reports previously said CDH would likely exceed its target but stay below the $2.5 billion hard cap.

The source explained, “There are not a lot of high-quality China managers [like CDH] out right now and investors constantly come up with allocations for Asia. Last year was not a big year for China managers coming to market so they should be able to [raise] quite a bit of money.”

CDH Investments is a spin-off from investment bank China International Capital Corporation, founded in 2002. The firm targets early-stage and expansion investments in China in sectors such as clean technology, healthcare, IT and education. As well as its US dollar funds, CDH has a number of RMB-denominated vehicles and a $150 million real estate vehicle named the CDH Special Situation Fund, which is targeting a final close in May 2013, PEI reported earlier.