France and China have launched a mid-cap private equity fund to boost investment and exposure between the two following a visit by the Chinese president to France earlier this year.

The Sino French mid-cap fund has reached a first close of 460 million euros ($627.5 million), its backers Bpifrance, China Development Bank (CDB) Capital and Cathay Capital said on Monday, in line with its target final close of 500 million euros.

Bpifrance, a part state-owned French fund, and CDB Capital agreed to be cornerstone investors in the fund in March this year. It will be managed by Chinese-French private equity house Cathay Capital. The companies launched a similar 150 million-euro fund focused on SMEs in 2012.

"Chinese companies will be able to benefit from advanced technological expertise which is well-developed in France, while, in turn, French companies will gain from increased exposure to the booming Chinese consumption market," said Haibin Fan, president of China Development Bank.

The fund, which will target growth and international expansion for French, Chinese and European companies, is being marketed under the name Cathay Midcap Growth Fund III.