China’s CDH Investments said to raise $1b for fifth mezzanine fund


Ardi Wirdana, May 14, 2018

Chinese fund manager CDH Investments has raised a sum of $1 billion for its China-focused fifth mezzanine fund, according to a report by Private Debt Investor. The first close of the fund came late last year at $484 million, with backers including insurance companies, banks, trust companies and other institutional investors.

Once officially closed, the fund is expected to more than double the size of the previous mezzanine fund, which secured a total fund of $529 million in 2016 and focused on mergers and acquisitions. It will provide capital to growth-stage companies in education, healthcare, energy, and the consumer sectors.

CDH Investment Managing Director Ning Hu had told local media that CDH’s four mezzanine funds are all fully invested, and its first fund is fully exited, securing returns higher than the 11 per cent average for the market.

Launched in 2011, CDH Mezzanine and Credit provides financing for mergers & acquisitions, high growth private businesses, fixed assets investments and non-performing assets.  It offers investors a variety of creative structures, including convertible bonds, preferred debt, subordinated debt, buyback of shares and allocation of equity interests.

On its website, the company says its mezzanine fund manages more than $1.3 billion in assets across four RMB funds. Since its inception, CDH Mezzanine and Credit has reportedly invested in 58 projects and completed exits for 60 per cent of its investments, according to its website.

CDH Investments is an alternative investment fund managers focused on China with over $17 billion of assets under management, as of December 31, 2017.

Established in 2002, CDH has grown beyond its private equity root and become a diversified alternative asset management platform covering real assets, venture and growth capital, mezzanine & credit, public equities and wealth management.

In one of its latest moves, CDH is said to have made a $1.41 billion offer for Australia’s liver-cancer treatment specialist Sirtex Medical. The acquisition is conditional upon approval of Australia’s Foreign Investment Review Board.

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