Private equity (PE) firm Cathay Capital announced on Monday the launch of its second Cathay Smart Energy Fund targeting a fund size of 1 billion yuan ($139.6 million), with French energy giant TotalEnergies serving as a cornerstone investor.
The second Cathay Smart Energy Fund is built on Cathay Capital and TotalEnergies’s long-standing cooperation since 2016, when TotalEnergies first supported the Paris-based fund manager in the creation of its venture capital (VC) arm, Cathay Innovation.
The second Cathay Smart Energy Fund, which also attracted the support of two state funds from Chongqing City in southwestern China, will see Cathay Capital double down on investments in the new energy sector in China and help the country’s energy companies accelerate their global expansion, said Cathay Capital in a statement.
The new fund will primarily invest in the industry chain of new energy vehicles (NEVs) and technologies for new energy power generation, innovative energy storage, energy management, as well as carbon reduction and zero-carbon solutions.
It also plans to support hydrogen and other green energy technologies and key technologies enabling the development of energy-related new materials, according to the statement.
The setup of the second Cathay Smart Energy Fund represents Cathay Capital’s further commitment to its “dual-wheel drive strategy” combining equity investments with real asset operation in China’s new energy industry, said the firm.
While its Smart Energy Fund series focuses on equity investments in innovative new energy companies, the firm also directly participates in the construction and operation of new energy infrastructure projects in China, through its Cathay New Energy Infrastructure Fund.
It officially built the Cathay New Energy Infrastructure Fund in partnership with Dajia Insurance Group in May 2024 to finance and operate 1.5 GW of solar power capacity for commercial and industrial clients in China. The fund counts TotalEnergies as a strategic partner.
Prior to the latest smart energy fund, Cathay Capital and TotalEnergies also joined hands in 2019—alongside Hubei High Technology Investment Guiding Fund Management, a state fund in central China’s Hubei Province—as the three founding parties in building the debut 1.5-billion-yuan ($209.3 million) Cathay Smart Energy Fund.
More recently, TotalEnergies joined a diverse group of institutional investors and multinational corporations (MNCs) backing Cathay Innovation’s third and latest $1 billion VC fund. The billion-dollar fund reached its final close this May as the largest artificial intelligence (AI)-dedicated VC fund out of the European Union (EU) investing globally in vertical AI-powered solutions across consumer, healthcare, financial services, and energy/mobility.
