CDH Investments raises $200m for debut venture fund

CDH Investments, a Chinese private equity firm that has raised two growth capital funds to date, has attracted $200 million for its third fund, the first to focus on providing capital to early-stage Chinese companies.

Stuart Schonberger, managing director of CDH Investments, said the maiden venture fund saw commitments from just under two-thirds of the existing investors from its previous funds.

International Finance Corporation has committed $20 million to the CDH Venture fund, the organisation said on its website.

The private equity investment arm of the Government of Singapore Investment Corporation (GIC), a US university endowment fund and a few fund-of-funds with offices in Singapore and Hong Kong have also invested in CDH Venture.

CDH is jointly owned by the team, GIC Special Investment, and Capital Z Investment Partners, an alternative investment sponsor with offices in New York, London and Hong Kong.

CDH Venture is close to a final close, and has a hard cap of $210 million, Schonberger said. The average deal size the fund will be targeting will range between $5 million to $15 million, he added.

As the venture fund marks a deviation from CDH’s growth capital strategy, it will be managed by a separate team led by former executives Wang Gongquan and Wang Shu of IDG Technology Venture Investment – one of the earliest US VCs to enter China.

“This way, we can maintain the discipline,” Schonberger said. Wang Gongquan joined CDH in 2005 and Wang Shu in the second quarter of this year.

CDH was founded in August 2002 as a spin-off from China International Capital Corporation, an investment bank.