Equity investment in the Cathay Small Cap III fund to support the development of French SMEs in China

Multi-country Global
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Prise de participation dans le fonds Cathay Small Cap III pour accompagner le développement des PME françaises en Chine
Cathay is a French company specialized in cross-border investment between China and France. It is launching Cathay Small Cap III, a fund which will make equity investments in companies with high potential for international development.
Client presentation
Cathay Capital Private Equity SAS (“Cathay”) is a French company specialized in asset investment and management in Europe and China. It was set up in 2006 by a Chinese entrepreneur, Mingpo Cai, and a French investor, Edouard Moinet. In 2007, Cathay raised its first fund with Proparco’s support. Cathay Capital I aims to support (i) French SMEs (smallcaps) seeking to develop in China or (ii) conversely, Chinese SMEs seeking to develop partnerships with French groups. Building on this initial success, Cathay has become a leading player in cross-border investment between China and Europe. Its team of over 50 people in 6 offices currently has over EUR 1bn under management.
Project description
The operation involves a EUR 10m equity investment in Cathay Small Cap III by Proparco. Cathay III targets significant minority or majority shareholdings. The fund will target companies with real international development potential seeking to develop on Cathay’s target markets. The investments will mainly be split between China and France and, more marginally, will be made in the rest of Europe. The objective is still to actively support the development of French SMEs in China, as well as Chinese companies on their domestic market, by giving them the opportunity to capitalize on the experience of Western SMEs.
Project impact
The main quantitative impact expected from the project involves job creation: we estimate that the project will create over 5,000 jobs in China. There will also be a number of qualitative impacts: support for internationalization processes, investment in sectors deemed to be priorities by Proparco, and support for the client in the implementation of appropriate environmental and social risk management, which has not yet been formalized.
12/05/2017
Date of signature of the project
Sectors
Multi-country Global
Location
Financing tool
10 000 000 Euros
Amount of funding
Equity investment of EUR 10m
Financing details
CATHAY SMALL-CAP III
Client
CES