UK government-backed funds of funds CDC Group has committed to two vehicles with combined targets of $225m (€174m) investing in small businesses in central and south-east Asia as a migration of capital to India and China has left companies starved for financing.

CDC has committed $30m to local mezzanine specialist Kendall Court’s second fund, which has a $150m target. The fund will focus on mezzanine growth capital and buyout capital investments in small to medium-sized companies.

CDC has committed a further $10m to a $75m fund by Kazakhstani investment company Centras Capital. The fund will primarily target small and medium-sized businesses in its home country.

Brian Lim, portfolio director for Asia at CDC, said: “Although the Asian private equity industry has grown strongly over the past three years, south-east Asia has seen less of this growth. With the growing migration of interest and capital to China and India, funding sources in south-east Asia have been relatively hard to access especially by SMEs looking for financing.

“However, mezzanine financing fits the profile of the predominantly family-run businesses in Asia.”

Last year emerging market firms raised $92.2bn across 175 funds falling shy of 2007's $96.5bn raised across 247 funds, according to data provider Preqin Ltd. Following larger falls in other markets emerging funds raised last year were only 36% less than Europe and equivalent to 29% of funds raised globally.

In a sign of the strength of emerging markets-focused funds generally last month, despite a difficult fundraising environment, emerging specialist Actis raised $2.9bn for a buyout fund. This fund was aimed at companies across Africa, China, India, Latin America and south-east Asia. The vehicle, about double Actis’ previous $1.5bn fund and ahead of its $2.5bn target, had already committed to invest in eight transactions.

Meanwhile in Europe, Italian mid-market private equity firm PM&Partners has raised €340m ($440m) for its second fund, exceeding its €300m target.

The fund received 54% of its commitments from foreign investors. Institutional investors including fund of funds, banking foundations and pension funds accounted for 57% of commitments. A total of 28% came from banks and insurance companies while 14% came from individuals and family offices.

The fund will focus on businesses with enterprise values of between €30m and €250m.