CMIA Capital Partners Pte, run by former bankers at Cargill Inc. and HSBC Holdings Plc, plans to raise $150 million for a private-equity fund by the end of the year to invest in Chinese agricultural businesses.
About 20 percent, or $30 million, of CMIA China Fund IV LP has already been invested in three companies, including Zhongtian Longzhou Agricultural Equipment Co., a farming machine maker, and Lvya Mushroom Co., producers of king oyster mushrooms, Co-Founder Lee Chong Min said. The fund will focus on agricultural, agribusiness and food industries that are expected to benefit from the country’s growing middle class, he said.
China’s domestic consumption is expected to grow as the Communist Party leadership is seeking to maintain a six-decade- long grip on power and sustain the nation’s expansion by boosting domestic demand. The government in February approved an income distribution plan as part of its efforts to boost minimum wages to at least 40 percent of average salaries.
“Our investments are all related to China’s consumption story,” Lee said in an interview in Singapore yesterday. “Domestic spending will be the big theme over the coming years after the expansion of the industrial sector.”
The fund, which is the company’s fourth, targets an internal rate of return of between 25 percent and 30 percent, said Lee. Singapore-based CMIA plans the fund to be fully invested by 2015 and hold each investment for between four and five years, he said.
Including the new pool, CMIA will have raised about $500 million since its inception in 2003, Lee said. Of the four funds, the first two have been fully divested and returned, he said, adding that the average gross internal rate of return of CMIA’s investments so far is 24 percent.
CMIA was founded by Anson Wang, who previously worked as a regional managing director at HSBC Asset Management in Hong Kong, and Lee, formerly the head of equity investment and trading for the Asia-Pacific region at commodity-trader Cargill in Singapore, according to CMIA’s website.
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