Abstract

Cathay Capital Private Equity (Cathay) was started by Mingpo Cai and Edouard Moinet in 2007, at the brink of the global financial crisis. The firm initially opened offices in Shanghai and Paris, aiming to invest in fast-growing small and medium enterprises, either French companies looking to expand in China or Chinese companies seeking to move up the global supply chain in France.
By the end of 2012, Cathay closed a EUR350 million second fund, and, planned to move beyond France and China, by looking at other European countries and the United States for potential deals. With the growing competition of local private equity (PE) firms in China and the ongoing European debt crises, was the firm ready to replicate its business model in other geographical markets in the near future? What did the firm have to do to ensure success in the long run?

Learning Objectives

This case illustrates how a private equity fund could differentiate itself in rapidly evolving capital markets and create value with an entrepreneurial approach to portfolio management. It shows the challenges faced by a private equity fund during different stages of the private equity investment process. In anticipation of accelerating market consolidation, especially in China, students can explore how Cathay can refine its investment and management strategy to achieve sustainable growth.