CDIB Capital bets on Alibaba-backed Best Logistics

The firm’s $45 million investment came from its debut Asian fund Capital Asia Partners.

Hong Kong-based CDIB Capital International Corporation, the international private equity arm of China Development Financial, has invested $45 million in Chinese logistics provider Best Logistics Technologies Limited, the firm said in a statement.

The deal was structured through its Capital Asia Partners Fund, a $405 million vehicle that provides growth capital and operational assistance to companies in China and the Asia-Pacific region. The fund closed in July 2015 and is currently 58 percent invested, according to a spokesperson for the firm.

Other investments from the fund include furniture e-commerce company Meilele, golfing equipment company Acushnet, footwear and apparel manufacturer CBA Sports and coffee retailer The Coffee Bean & Tea Leaf.

CDIB’s investment in Best Logistics will be used to expand the company’s core operations and to further its business initiatives, capitalising on China’s e-commerce growth, logistics sector consolidation and long-term outsourcing trends.

“In a short period of time, Best Logistics has established itself as an industry leader at the forefront of logistics technology” said Lionel de Saint-Exupery, president and chief executive officer of CDIB Capital. “We've been impressed by the company's ability to provide complex turn-key logistic solutions across the country and beyond.”

Best Logistics is a China-based IT-driven supply chain and logistics provider. The company has been backed by Chinese e-commerce giant Alibaba, Taiwanese electronics manufacturer Foxconn, the private equity arm of Goldman Sachs, China Renaissance Capital Investment, Walden International, CDH Investments and IDG Capital Partners.

The International Finance Corporation, the World Bank’s investment arm, has also said in a disclosure in January that it is looking to invest nearly $20 million in the company.

Investors are pouring money into China’s booming logistics sector as online retailers Alibaba and JD.com experience rapid growth and need reliable and logistics partners. China’s logistics sector expanded to 53 points earlier this year, according to data from the China Federation of Logistics and Purchasing.

It is estimated that China’s annual private consumption will reach $6.5 trillion by 2020, with an about $1.6 trillion coming from e-commerce, according to a study by the Boston Consulting Group.

CDIB focuses on private equity direct investments, with more than 30 partnerships with GPs including The Carlyle Group, Goldman Sachs, KKR and Thomas H Lee, according to PEI Research & Analytics.