China Everbright to raise $500m infra fund, plans water fund

The Hong Kong-listed fund manager has recently acquired an undersea cable project in Hong Kong as the second seed asset for its overseas vehicle.

China Everbright said it will kick start fundraising activities for its overseas infrastructure fund, as well as several investment vehicles for other asset classes this year.

“It will embark on a new round of financing for a USD-denominated mezzanine fund, water fund, overseas infrastructure fund and healthcare and elderly care fund,” said the firm.

“The overseas infrastructure fund targets brownfield assets with stable cashflow in the overseas market,” said Chen Shuang, chief executive of the Hong Kong-listed fund manager, during a press conference last week, adding that the fund should close on around $500 million.

He added the firm has already invested in two assets to seed the fund. Last October, the firm teamed up with another Chinese partner Friedmann Pacific Asset Management to fully acquire Albania’s Tirana International Airport for around $100 million, as the first seed asset for the overseas infrastructure fund. Recently China Everbright acquired an undersea cable project in Hong Kong as the second seed asset.

China Everbright also looks to mull a water fund, which targets domestic wastewater treatment projects. Chen said the idea of setting up a water fund is still in the early stage. In the past few years, the firm saw China’s PPP projects more like governments’ liability rather than attractive investment opportunities. However, a potential model for the fund is to team up with strategic players to co-develop projects, Chen said.

China Everbright Group, the state-owned parent of the fund manager, has a water business platform to develop water-related projects in China. Last week, China Everbright Water won a 3.1 billion yuan ($450 million; €422 million) bid to build several water treatment facilities for integrating urban-rural water supply systems in Ji’nan’s Zhangqiu.