China’s CICC Plans $300 Million PE Fund

BEIJING (Reuters) – China International Capital Corp (CICC), the country’s biggest investment bank, is planning to raise a $300 million fund in September, stepping up its efforts to tap into China’s lucrative private equity sector.

The dollar fund would be raised through CICC’s Hong Kong unit and CICC would contribute about 10 percent of the total sum, Shirley Chen, head of CICC’s private equity business, told reporters on the sideline of a industry forum on Thursday.

Targeting an annual internal rate of return of 25 percent, the fund would primarily invest in companies in consumer, healthcare, new energy and education sectors, she said, adding that deal size would average between $20 million and $30 million.

“We don’t really have any limitations on where we can invest because we have a very large platform with deal referrals and huge research coverage in every single sector,” Chen said.

CICC, which entered the private equity business in 2007, had invested around $100 million in at least five companies, two of which had already gone public and three expected to sell shares publicly this year or next, Chen said.

The dollar fund would also allocate no more than 10 percent, or $30 million to financing companies set to go public on the ChiNext, the home-grown Nasdaq-style market, she said.