CID Group closes Taiwan fund

The firm has raised $50m from LPs, a large step down from its $430m predecessor vehicle, as it refocuses on the local market.

Taipei-based CID Group has made a final close on $50 million for its latest private equity vehicle, according to a filing from the US Securities and Exchange Commission.

CID Greater China Fund IV, which will invest in semiconductor businesses in Taiwan, will include an additional $50 million in GP commitment to total $100 million. Nonetheless, the new fund is much smaller than the firm’s previous vehicles. Fund II and Fund III raised $225 million and $430 million respectively, according to Private Equity International’s Research & Analytics division

One LP source told PEI that the fund has dialed down its fund size significantly after deciding to refocus on opportunities in the Taiwan market. 

The source said, “They essentially went out and marketed a similar size vehicle for Fund IV which was initially hardcapped at

CID’s Fund IV story is that it's moving back to Taiwan, where there are now much more attractive opportunities. The firm will invest in publicly-listed semiconductor businesses in a consolidation play.

LP source

roughly $400 million. But at the 11th hour they came back and changed the structure of the fund to raise $50 million from LPs and $50 million of their own GP capital to invest alongside every deal.”

“We as LPs were quite attracted – they have a very methodical approach to [investing], how they build companies, and the senior [industry] executives they have brought in are very [impressive], senior guys,” he said. 

The firm decreased its fund size to fit Taiwan's domestic market, having invested heavily in Mainland China from its previous vehicles.

CID Group's Taiwan portfolio has performed much better than its investments in China, the source added.

Taiwan is getting another look from investors as regulators make moves to open up to private equity. 

In September, former executives from Goldman Sachs, Temasek and The Blackstone Group launched a $300 million fund called Zoyi Capital to access companies in Taiwan, PEI reported earlier.

The launch came shortly after Taiwan announced it would implement an amendment to its M&A policy that will set a more methodical and transparent approval process for private equity bids.

“[CID’s] Fund IV story is that it's moving back to Taiwan,” the source said, adding that there are now much more attractive opportunities in the country. The firm will also invest in publicly-listed semiconductor businesses in a consolidation play and combine them into one large or several larger companies.