Huifa China Fund, the first mezzanine financing fund in China, recently announced that it received follow-on investment worth US$100 million from Netherlands Development Bank, German Development Bank, France Development Bank as well as Itochu Corporation. So far, Huifa China Fund has managed two funds with a collective size of US$200 million.

Mezzanine financing, a financing strategy between equity financing and general debt, is a long-term unsecured debt. This debt financing entitles investors' subscription rights to buy the investees' equity interests.

Qi Wang, a managing partner at Huifa China Fund, said that as a major Traditional industry-focused fund, has brought juicy returns for its shareholders (including Netherlands Development Bank) since it established its first fund in 2005. This is why shareholders increase another US$100 million capital in Huifa China Fund, helping launch the second fund.

Daming Zhou, a joint director at Huifa China Fund, expressed that the company is well-positioned to provide Mainland China-based small and medium-sized private enterprises with capital support, thereby helping SMEs address the hard financing issue.