The CDH Team consists of 8 investment professionals led by Dr. Wu Shangzhi, President of the fund management company (CDH), and Managing Directors Mr. Jiao Zhen and Mr. Stuart Schonberger, who have an average of eight years of China-specific private equity experience each. CDH is jointly owned by the CDH Team, GIC Special Investments Pte. Ltd (GICSI), and Capital Z Investment Partners L.P. (CZIP). GICSI is the private equity investment arm of the Government of Singapore Investment Corporation. CZIP is the New York based private equity fund of funds program affiliated to the Zurich Financial Services. Other potential investors in CDH II are expected to be mainly institutional investors from the US, Europe and Asia. Many CDH I investors are expected to continue to participate in CDH II.

CDH II expects to raise a total amount of $310 million, of which the proposed IFC equity investment of $20 million will represent no more than 10%.

18.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	18.0

* These investment figures are indicative

CDH II would be established as a Cayman Islands exempted limited partnership. Companies with substantial operations in China are the geographic focus of the investments. The investment team will operate out of China with its headquarters in Beijing.

China's private equity industry, although growing fast, is still young and immature. The project would contribute to the development of this asset class by supporting a local team with strong track record who would help to set standard for the local industry as it develops while laws and exit options in the local market improve. In addition, an increasing number of young but rapidly growing Chinese private sector companies have ambitious plans to become strong national and international players. These companies need not only equity capital to leverage the financing of their expansion plans, but most of all, the strategic partners who can provide the hand holding required to build the capacities in corporate governance, financial and information management and operational efficiencies to support a sustainable growth. The CDH Team has built its reputation as a value-added investor in the above aspects. Specifically, CDH II is expected to achieve the following development impact: - Helping some of the best Chinese private companies to gain access to international capital markets by providing expansion capital and management assistance and helping to improve their corporate governance, environmental and social practice significantly. This would, in turn, achieve demonstration effect among other private companies. - Enabling the CDH Team to expand its deal capacity and become a sustainable and institutional quality fund management organization. - Mobilizing additional institutional capital to the asset class by demonstrating that private equity is a viable investment strategy in China. IFC is expected to play the following role: - Offering a vote of confidence to the CDH Team, as a lead investor in CDH I, and a follow-on investor in CDH II. This is critical in supporting fundraising for CDH II. - Supporting the institutionalization of CDH Team who would focus on upgrading its team skills and expanding deal capacity. - Continuing to promote best practice corporate governance, environmental and social standard at the Fund and investee level. The CDH Team continues to be committed, in developing their own fund and helping their investees, to building governance structure and process and environmental and social systems based on industry best practices. IFC has been engaged as the Corporate Governance and Environmental & Social Sustainability Advisor to the Fund Manager since 2002.

This is a category F1 Type 2 project according to IFC’s environmental review procedure. The Fund Manager has committed to establishing an environmental management system that will ensure that investments are consistent with applicable host country environmental laws and regulations as well as applicable World Bank Group environmental, health and safety guidelines and policies; designating appropriate individuals who will have responsibility for the environmental and who will attend IFC’s environmental management workshops; submitting to IFC an environmental management plan; obtaining clearance by IFC for any category A or infrastructure investment by the fund; and submitting to IFC an annual environmental performance report.
Location of environmental documents in locally affected community