CDH registers $2bn China fund with SEC

The Hong Kong-based private equity firm has officially launched its fifth growth capital vehicle, according to a US Securities and Exchange Commission filing.

Indicating an intention to raise capital from US institutional investors, CDH Investments has filed a Form D with the US Securities and Exchange Commission for its latest China-focused vehicle, CDH Fund V, according to an SEC document. 

CDH declined to comment on fundraising.

The firm declined to disclose the fund’s target amount in the filing, but industry sources close to the matter previously told Private Equity International its target is $2 billion – CDH's largest US dollar fund to date.

Despite filing the fund with the SEC in late January, the firm began marketing the fund in September 2012, sources with direct knowledge of the matter said.

“The indication is that they haven't had any [commitments] so far, meaning that they have not been able to push investors that fast into the fundraising,” said one of the sources.

The SEC filing also showed that the number of investors that have committed to the fund is zero, with the “first sale yet to occur”. 

However, the registration with the SEC could imply that the firm will soon close on a number of commitments, likely from US institutional investors, as one source that spoke with the firm recently said, adding that CDH Fund V expected its first close before Chinese New Year in mid-February 2013.

He told PEI, “[CDH] has been historically backed by a lot of the Asian funds of funds. One of [the firm's] challenges right now is they have grown substantially in size and actually when you grow in size it is investors like funds of funds that get very nervous. So, they have been spending a bit of time with new investors, particularly with bigger US-based investors and pension plans to convince them to come in.”

CDH, which raise both US dollar and RMB funds focused on China, currently has a number of funds in market. They include a third venture capital fund, which was expecting a final close in November, having made a $100 million first close in September, PEI reported earlier. CDH could not be reached for an update on the fund. 

The firm is also raising a $150 million real estate vehicle named the CDH Special Situation Fund, which is targeting a final close in May 2013. 

In 2011, CDH launched its second RMB growth vehicle targeting RMB10 billion (€1.2 billion; $1.6 billion), according to PEI's data division. The fund has raised RMB7 billion as of July 2012.

CDH Investments was founded in 2002 and does private equity, venture capital and real estate investing in China.