Chinese investment banking firm CEC Capital Group has reached a first closing of RMB3 billion (US$430 million) for its maiden future industry fund, which will invest in companies operating in innovative industries in China.
The vehicle secured commitments from a wide range of investors, including government guidance funds such as the Yangtze River Industry Fund, state-owned enterprises, including Beijing Shougang Co., Ltd., publicly listed companies, such as KPC Pharmaceuticals Inc., and other unnamed institutional investors, the firm announced yesterday.
"We want to become the financial world’s new spices that combines and leverages investment banking and direct investments closely," said Wang Ran, founder of CEC Capital, a former Goldman Sachs banker and Harvard MBA graduate. "I believe rather than simply adding investment banking and direct investments together, leveraging the two could create exponential opportunities for us."
The fund will focus on the telecom, media, technology, consumer and healthcare industries. Specifically, it will seek opportunities in the media, entertainment, sports, artificial intelligence, smart hardware, data services, modern logistics, and healthcare sectors.
As one of the largest RMB-denominated investment vehicles raised by an investment bank, the fund made its first investment last month, joining an undisclosed series C round in Alog, a Chinese e-commerce warehouse management operator.
"The investment in Alog represents the support of CEC Capital’s investment banking platform to our asset management business. Although our fund team will be independent, the investment banking platform will always provide support for us," said Xu Huaze, managing partner at CEC Capital.
CEC Capital previously raised its first U.S. dollar fund in 2014, with a focus on the healthcare industry. As of the end of the first quarter, the fund has made a total of six investments and achieved one exit, the firm said without providing details. It plans to raise its second U.S. dollar fund at the beginning of next year.
Founded in 2000, CEC Capital’s core businesses are merger and acquisition advisory services, private equity and asset management. It currently has offices in Shanghai, Los Angeles and San Francisco. From 2015 to 2016, it completed advisory work on around 80 M&A deals with total transaction value of RMB90 billion (US$13 billion), according to the announcement.