Etech Capital and state-backed Yufu Assets Management Company intend to establish a private equity joint venture firm to raise a RMB5 billion ($764 million; €540 million) fund.
Yufu Assets Management Company will invest RMB1 billion in the fund and collaborate with Etech Capital to raise RMB2 billion from domestic investors. Etech Capital will raise the remaining RMB2 billion from overseas investors, according Hunter Wen, senior vice president of Etech Securities.
Not less than 25 percent of the fund’s capital will be invested in Chongqing, with the remainder invested in China including Hong Kong and Taiwan. The fund will primarily make growth investments of between RMB100 million and RMB500 million in sectors such as consumer, pharmaceutical and medical equipment, manufacturing and infrastructure. It is open to co-investments, Wen said.
Etech Securities is an Asia-focused bank headquartered in Pasadena, in the US with offices in Los Angeles, Seoul, Shanghai, Beijing, Hong Kong and Taipei.
Currently, the bank is shifting its focus from investment banking to fund management and has designated Chongqing as the headquarters for both the investment banking and fund management team.
“Shanghai is too crowded and Beijing is too political. On the other hand, Chongqing with 50 percent higher GDP growth rate than the national average is full of opportunities for advisory and direct investment,” Wen said.
Yufu Assets Management Company is based in Chongqing, the largest and most populous of China’s provincial level municipalities.
This week, UK-based investment firm the Rockley Group entered into an agreement with Shandong High-Tech Investment Corporation and the Shandong Academy of Sciences to raise a $100 million private equity fund focused on Shandong province, China.