In the last article, we examined the Hefei style of government investment. The local government’s special philosophy in making surprising investments has attracted advanced industry chains and spurred local employment and economic growth. But we can also see other local Chinese governments adopting the pattern. Not all the cases belong to private equity investment, as there are debt vehicles also utilized. However, our point is to consider the growing trend of governments investing and lending to draw high-potential companies to settle within their jurisdiction, while stimulating growth in related industry clusters. …

This week (2021.5.10–2021.5.16), PE Weekly covers Fundraising and policy news on PE market.

Fundraising

China’s Golden Eagle to Launch Fund to Fuel Local Green Industry

14 May 2021 — — Golden Eagle International Group, Nanjing’s first foreign enterprise group, has announced to set up an industry fund in southeast China’s Guizhou province in a bid to facilitate the development of green energy and other industries. Chen Yihang, the CEO of the group, disclosed that the fund will be launched with a total capital commitment of CNY 8 billion ($1.2 billion). Read more…

China’s Wuhu 37 Interactive Co-Launches $78 Million Fund…

By Yan Meng

In Hefei, local authorities have established a market-oriented, government-guided industrial investment fund to attract strategic industries to settle down. And it’s turned the county into a multi-trillion-yuan GDP contributor. But what is the Hefei style? Why does it prove so successful? And are there other local Chinese governments that can do the same?

An Investment Mindset for a Municipal Government

Hefei style lets local governments bring in an industry using an equity/venture investment method and then cultivate it like an investment bank would. They use a large sum of investment funds to fish out industry shapers first…

This week (2021.5.3–2021.5.9), PE Weekly covers Fundraising and policy news on PE market.

Fundraising

China’s CICC Capital Joins Hands with SAIC Motor to Set up $1.5 Billion Fund in Suzhou

6 April 2021 — — CICC Capital, one of China’s leading investment banking firms, has joined hands with SAIC Motor Co., Ltd and a Suzhou government-backed investment company to launch a CNY 10 billion ($1.5 billion) fund, targeting CNY 5 billion ($777 million) in the first close. The new vehicle mainly invests in premium projects in high-end equipment, smart manufacturing, smart connectivity, semiconductor, AI and other automobile industrial chain related industries. Read more…

China’s Gemdale Commits $15 Million to Healthcare Fund

6 April…

This week (2021.4.26–2021.5.2), PE Weekly covers Fundraising news on PE market.

Fundraising

China’s SF Express Sets up $300 Million Fund for Logistics Development

30 April 2021 — — SF Express, Chinese rival to FedEx, announced the partnership between its subsidiary and Hammer Capital Real Estate Limited to launch a logistics development fund and invest in logistics industrial park projects recommended by the company. The fund targets $300 million in the first close. Read more…

Shandong Sets up $46 Million Fund in Zibo City for Rural Revitalization

30 April 2021 — — East China’s Zibo city in Shandong province announced its…

Since the Chinese regulator thundered out the New Asset Management Rules (New AMR) in 2018, Chinese private equity (PE) and venture capital (VC) firms have been deprived of a major capital source from banks. Covid-19 has only exacerbated their fundraising dilemma, with total raised capital dropping from CNY1.8 trillion ($277.0 billion) in 2018 to CNY1.2 trillion ($184.7 billion) in 2020. With the transitional period ending in 2021, both banks and PE/VC firms are making last-ditch efforts to find an opening in the sealed door.

Xie Dong, CPPCC member and director of Shanghai Municipal Financial Regulatory Bureau, recently suggested that commercial…

This week (2021.4.19–2021.4.25), PE Weekly covers Fundraising news on PE market.

Fundraising

China’s Wuxi City to Set up $9 Billion Fund of Funds for Biomedicine Industry

23 April 2021 — — Wuxi City, located in eastern China’s Jiangsu province, has given the priority to biomedicine industry on its development agenda. With some 1,000 biomedicine enterprises clustering in the city, Wuxi municipal government has determined to act as a coordinator to set up a CNY 60 billion ($9.2 billion) fund of funds targeting at the investments in biomedicine and other strategic industries. Read more…

Hillhouse Capital Joins Hands with China’s SIPAC…

This week (2021.4.5–2021.4.11), PE Weekly covers Fundraising news on PE market.

Fundraising

China’s CATL to Commit $153 Million to Industrial Fund for New Energy

16 April 2021 — — Contemporary Amperex Technology Co., Limited (CATL), a global leader in the development and manufacturing of lithium-ion batteries, announced that its wholly-owned subsidiary Ningbo Meishan Bonded Port Area Wending Investment Partnership commits CNY 1 billion ($153.3 million) as a limited partner to set up a CNY 3.4 billion ($521.4 million) industrial fund. The new vehicle keeps its eyes on investments in such fields as battery raw materials, power battery system solutions, new…

On March 9, two Qualified Foreign Limited Partnership (QFLP) funds completed their filing with the Asset Management Association of China (AMAC). Managed respectively by ZhenFund and MSA Capital and registered in Sanya central business district (CBD), the funds represent early movers in an exciting new business environment and policy system developing in Hainan province and broader China.

Encouraging Cross-Border Investment

Since Hainan Free Trade Port released the Interim Measures On QFLP Domestic Equity Investment, these are the first market-oriented QFLP funds to file, blazing a trail for the Port to support entrepreneurship and innovation. Setting up the two funds is…

This week (2021.4.5–2021.4.11), PE Weekly covers Fundraising news on PE market.

Fundraising

Hangzhou Sets up Fund of Funds Worth $15.3 Billion

9 April 2021 — — Hangzhou, the capital city of China’s eastern province Zhejiang, announced to launch a CNY 100 billion ($15.3 billion) fund of funds to promote the clustering of major industrial projects in the city during China’s Fourteenth Five-Year Plan. Read more…

China’s Baotou City Rolls Out $153 Million Guidance Fund for Emerging Industries

9April 2021 — — Dubbed Baotou Shiguai District Innovation Industrial Guidance Fund (LP), the first government-guided fund launched by district-level government in the…

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