Bright Food (Group) Co., a major Chinese food company and a unit of CITIC Group, China's biggest financial conglomerate, has formed a 2 billion yuan (US$264 million) private equity fund to invest in China's food industry.

Bright Food and CITIC Capital Holdings Ltd. will each hold a 50 percent stake in the fund, which will target raw materials, research, production, packaging and retailing businesses in the food industry, Bright Food said in a statement on its Web site. Bright Dairy's contribution to the fund is part of a 9 billion yuan investment plan for expansion over the next three years, said Xu Yongxin, a spokesman for the Shanghai-based company.

The tie-up came days after state-owned Bright Food signed a strategic cooperation agreement with Indonesian conglomerate Salim Group for overseas expansion. (For details click on [ID:nPEK75155])

Bright Food was created a year ago as the result of a government-directed merger of four state-owned food companies in Shanghai.

Bright Food, which owns four Shanghai-listed companies and about 3,300 retail outlets, posted 45 billion yuan ($6 billion) in sales last year. CITIC Capital, founded in 2002, manages more than $1.3 billion and invests mainly in China. The company in April said it had raised US$425 million for buyouts in China.

CITIC Capital came to prominence with a landmark investment in Chinese pharmaceutical firm Harbin Pharmaceutical Group (stock code: 600664) jointly with U.S. private equity firm Warburg Pincus.