Cathay Capital has raised an initial €600 million for its fund Cathay Midcap II, which targets €1.2 billion to finance mid-cap companies, according to a press release by the European Commission that was made public on August 6.
The fund is backed by the European Investment Fund under the Juncker Plan’s European Fund for Strategic Investments (EFSI), as well as the China Development Bank, French national promotional bank Bpifrance, China’s Silk Road Fund, sovereign funds, institutional and other private investors. It is the first fund to be set up under the China-EU Co-investment Fund (CECIF) programme, which was established by the EIF and SRF with the aim of developing synergies between the Belt and Road Initiative and the Juncker Plan. At the EU-China Summit in Beijing in July, the EIF and the SRF signed a Memorandum of Understanding to confirm this first co-investment.
The fund will support mid-cap companies with high growth potential in Europe and China, in areas such as healthcare, high-end industries, consumer goods and business services.
Jyrki Katainen, Commission Vice-President responsible for Jobs, Growth, Investment and Competitiveness, said: “We have been working towards this moment since we set up the EU-China working group in 2015 in Beijing. I am very pleased that we are now seeing the fruits of that labour and that the Cathay Midcap fund will finance European and Chinese high potential mid-cap businesses in strategically important sectors. This is a very good example of how private and public investors can work together.”