Jul 1, 2011
CMIA Capital Partners launches new US$200 million growth capital fund
- CMIA's fourth growth capital fund, the CMIA Fund IV L.P., seeks to provide growth capital to companies in Asia, including Singapore
- Targeting companies with strong management teams and clear competitive strengths in industries such as food & agriculture and healthcare / pharmaceutical
- The Fund will play the role of a strategic investor in helping these companies capitalise on business opportunities, especially in China
- CMIA has a strong track record leading over US$600 million in private equity investments across China, including SGX-listed China Minzhong Food Corporation and C&O Pharmaceutical
CMIA Capital Partners ("CMIA"), a private equity firm focused on investment opportunities in China and Southeast Asia, is pleased to announce the launch of its fourth growth capital fund, the CMIA Fund IV L.P. ("the Fund"). The Fund is a US$200 million investment partnership that seeks to provide growth capital to companies in China and Southeast Asia, including Singapore. The Fund seeks to fund and partner with companies with experienced management teams and good track record, with clear competitive advantage in business and in need of financing to enable them to leverage on attractive business opportunities, including mergers & acquisitions, product line extension and geographic expansion opportunities.
In particular, the Fund believes that China will continue to lead global economic growth and is keen to work with companies to capitalise on growth capital opportunities in China, in industries such as in the food & agriculture and healthcare / pharmaceutical sectors. CMIA also has close business partners in and a good network of government and business contacts across Asia and the Middle East regions and would also be keen to work with suitable companies to leverage on business opportunities in these regions.
According to Mr. Lee Chong Min, Co-founder and Managing Partner of CMIA, "Founded in 2003 by Anson Wang and I, we were one of the early private equity firms with a focus on investment opportunities in China. Investing across a broad range of industries and sectors, we were able to capitalise on China's strong economic growth to generate good investment returns for our funds and investors. We are now almost ten years' old as an independent investment firm, although Anson and I have worked together as early as the late-1990s. As investment professionals, we have experienced very volatile economic environments, such as the 1998 Asia financial crisis and the 2008 global economic crisis. We have had many successful investments and also bear scars from lessons learnt. We have been through both up cycles and extreme downswings, and are a proven and significantly more experienced investment firm."
"CMIA has accumulated a wealth of knowledge and experience in investing and managing successful Chinese companies which we bring to this new Fund. With China's favourable macroeconomic outlook and government policies as laid out by the 12th Five Year Plan announced by the National People's Congress in March this year, we are confident about the prospects of the new Fund. In particular, we are seeking to provide growth capital to companies, within and outside China, with strong management teams that are engaged in businesses or seeking to expand their businesses in high-growth sectors in China that demonstrate clear and attractive growth or expansion potential. CMIA will play the role of a long term strategic investor in helping these companies capitalise on market opportunities and realise their potential." Mr Anson Wang, co-founder and Managing Partner of CMIA, adds.
Benefitting from the Middle Kingdom's potential
China is the fastest growing economy in the world and has led global economic growth with an average GDP growth rate of 10.3 percent for the ten-year period of 2000-2009. China is expected to continue to lead global economic growth in the coming years. In March 2011, China's 12th Five-Year Plan for National Economic and Social Development (2011-2015) ("FYP") was approved during the National People's Congress. The 12th FYP marks a turning point from focusing purely on growth to a broader focus on "higher quality growth" and "inclusive growth, targeting a GDP growth rate target of 7 percent over the 2011 to 2015 period. The 12th FYP includes initiatives focusing on the economic rebalancing theme, such as promoting domestic consumption over investments and exports, closing the rural-urban income gap and increasing social safety nets, and reducing energy use through a range of energy efficiency targets.
Many companies across a variety of industries including agriculture, consumer, healthcare and infrastructure sectors are expected to benefit strongly from the implementation of the 12th FYP and have the opportunity to establish themselves as industry and market leaders domestically and globally. In addition, the 12th FYP has also identified seven Strategic Emerging Industries which China plans to develop and provide support through preferential tax, fiscal and procurement policies. The companies in these industries will require growth capital to capitalise on such market opportunities The Fund seeks to identify and invest in such companies.
In particular, CMIA has identified the agriculture sector as one of its key sector focus as it seeks to capitalise on the favorable macroeconomic fundamentals surrounding the global and, in particular, China's agriculture sector. From a global macroeconomic perspective, global demand for agricultural produce and, accordingly, the food, feed and fuel requirements necessary for such production have increased consistent with a growing world population, whilst supply is constrained by a shrinking supply of arable land as a result of industrialisation and urbanisation. Within China, agriculture accounts for around 11 percent of GDP and over 40 percent of employment, signifying that the industry remains a vital contributor to China's economy and ensuring government protection and favourable investment terms. The 12th FYP has also highlighted the agriculture sector as strategically important for the country to enjoy continued economic stability and prosperity and has laid out favourable government policies to support the agriculture sector. This reiterates the importance that China places on the growth of the sector and enhances the attractiveness of the Fund.
"Having made successful early investments in SGX-listed China plays like China Minzhong, we are again looking to identify companies with similar growth potential to add to our investments. Given the tremendous potential yet under-served nature of the agricultural sector, this is an area that we are keen to explore through direct investments or by establishing partnerships with well-managed companies on attractive terms. The agriculture sector also comprises a vast and diverse investible universe, from animal protein to oil seeds complex, each with its own value proposition for investors. As one of the seed investments for the Fund, we have identified and made our initial investment into Emerald Asia, an established integrated mushroom and fungi producer and processor in China.", added Mr. Lee.
The Fund will otherwise opportunistically invest in companies in other industries, such as the consumer and healthcare sectors which are also poised to benefit from China's macroeconomic trends and government policies.