CDIB plots 2017 fundraising

The private equity arm of China Development Financial Holding Corporation has deployed 61% from its $405m debut fund.

Hong Kong based-CDIB Capital, the private equity arm of China Development Financial Holding Corporation, has invested RMB 200 million ($30 million; €27 million) in Chinese outdoor sporting goods retailer TuTwo Outdoor Company as it seeks to capitalise on China’s changing middle class lifestyle.

The investment came from Capital Asia Partners Fund, the firm’s 2015-vintage vehicle that raised $405 million in July last year, against an initial target of $500 million. The fund, which provides growth capital to Asian companies, is currently 61 percent invested, according to a spokesperson for the firm.

Plans for a second fund will likely come ahead of schedule, the spokesperson added, but will not happen until 2017.

Limited partners in CDIB include funds of funds, family offices, sovereign wealth funds, and insurance companies, according to a statement.

Along with TuTwo, the CDIB Capital has invested in Alibaba-backed logistics and warehousing company Best Logistics, e-commerce company Meilele, footwear and apparel manufacturer CBA Sports, and coffee retailer The Coffee Bean & Tea Leaf.

The firm’s investment in TuTwo, which operates over 900 stores across in China, will be used to expand the company’s specialty brand offering and omni-channel retail platform.

“We believe that the outdoor sports sector offers tremendous growth potential in China as the middle class starts adopting healthy recreational activities as a way to enjoy their free time” Lionel de Saint-Exupéry, president and chief executive officer of CDIB Capital said.

The Chinese consumers’ high spending power and evolving lifestyle has made an impact on their consumption behaviour, making them the target of both foreign and domestic manufacturers and opening new opportunities for the sporting goods sector. According to a report from HKTDC Research, the sale of outdoor sports gear continues to rise, jumping from less than RMB 1 billion in 2004 to about RMB 18.1 billion in 2013, or an average annual growth of 40 percent over a decade.