CITIC PE nears first close on $2bn China fund – exclusive

The Chinese private equity firm expects to raise close to 70% of the target for CPE China Fund III by March.

CITIC PE is expecting to hold a first close in March on about $1.4 billion towards a $2 billion original target for its latest vehicle, Private Equity International has learned.

The Beijing-based firm began fundraising for the CPE China Fund III, which has a $2.2 billion hard-cap, in December. Fund III is roughly 50 percent larger than its predecessor, a 2015-vintage vehicle which closed on $1.3 billion.

All existing limited partners of CITIC PE, which include sovereign wealth funds, government and company pension funds, university endowments, financial institutions, family offices and funds of funds are “keen to participate in Fund III”, a source with knowledge of the fundraising told PEI.

The source added the firm expects to have a more diversified investor base for Fund III than its previous vehicles. A final close is expected around summer.

Limited partners that have backed CITIC PE’s previous funds include AP Fonden 2, Pantheon, University of Oklahoma Foundation and China Life Insurance Company, according to PEI data.

CITIC PE, which ranks 78th in the latest PEI 300, has over $15 billion under management across  eight US dollar-denominated and renminbi-denominated funds. The firm typically invests in five sectors: technology and internet, industry and energy, finance and business services, consumer and leisure, and healthcare.

In April last year, Réal Desrochers, former head of private equity at the California Public Employees’ Retirement System, joined the firm as managing director. It is understood Desrochers will be responsible for strategy development, risk management and establishing a US outpost in the near-term.

CITIC PE declined to comment on fundraising.