Report: China approves new PE funds(3)

China has reportedly approved four new private equity funds dedicated to high priority sectors, less than a year after launching its first private equity fund.

China’s State Council has approved four new private equity funds to support business in the energy, innovative manufacturing and high technology sectors, according to weekly Chinese business publication Caijing Magazine.

The Shanghai Financial Fund will reportedly raise Rmb 20 billion ($2.6 billion, €1.9 billion); The Guangdong Nuclear Power and New Energy Fund and the Shanxi Coal Fund will each raise Rmb10 billion; and the Sichuan Mianyang High Technology Fund will raise Rmb 6 billion.

Also approved was the China-Singapore Suzhou Industrial Park Fund, which will raise up to Rmb 10 billion. As previously reported by PEO, potential sponsors for that fund include China Life Insurance and China Development Bank. The fund intended to support the park’s shift in focus from simple manufacturing to “hi-tech and business process outsourcing value-added industries” according to the China Daily. The park was lauched in 1994 in conjunction with the government of Singapore, but has not been as successful as its sponsors hoped.

The funds will be modeled after China’s first wholly domestic private equity fund, the Bohai Industrial Investment Fund, which was established in December with Rmb 20 billion to provide funding for companies struggling to access bank loans in Tianjin’s Binhai New Area.

Goldman Gao Hua Securities head Fang Fenglei is also said to be seeking approval for a domestic private equity fund that will target Rmb 6 billion.