CITIC Capital raises $500m for second China fund

The alternative investment firm has a held a first close on its second buyout fund, the final target for which is undisclosed.

Hong Kong-based CITIC Capital has raised $500 million for the first close of its second China-focused buyout fund.

A spokeswoman confirmed the first close took place at the end of February, but declined to comment on the fund's target amount.

CITIC Capital closed its first China-focused private equity fund in May 2007 on $425 million, well over its target of $250 million. Some of the investors in that fund included CITIC Capital Holdings, Singaporean sovereign wealth fund Temasek Holdings, GE Capital, Siguler Guff, CDC, Orix and Sumitomo Trust Bank.

The firm’s first fund focused on buyout and privatisation opportunities in Chinese companies, particularly those active in the consumer products and manufacturing sectors.

It was reported last week that CITIC Capital is in talks with China’s National Social Security Fund and the China Development Bank to launch a buyout and a venture capital fund.

In January, the firm closed Capital China Real Estate Investment Fund III on $400 million. CITIC’s third China-focused real estate fund will make value-add investments in distressed properties and will invest with domestic developers in need of capital.

CITIC Capital also manages private equity funds focused on Japan and the US. It invests in Japan through CITIC Japan Partners which closed in 2004 with commitments of ¥16.9 billion ($172 million; €132 million). In the US, the firm invests through two funds, CITIC Equity Partners I and II.

The firm has offices in Hong Kong, Beijing, Shanghai, Tokyo and New York.