UOB sets up $15bn Sino-Singapore fund

The private equity arm of the Singapore-based UOB will invest primarily in Chongqing-based companies exploring western China and Singapore tie-ups.

A unit of Singapore’s United Overseas Bank (UOB) is teaming up with three Chinese companies to launch a CNY 100 billion ($15.4 billion; €13.6 billion) private equity fund that will target investments in financial services, transportation and logistics sectors in Chongqing, China, the companies said in a joint statement.

UOB Venture Management, the bank’s private equity arm, has signed an agreement with three firms: state-owned capital investment company Chongqing Yufu Asset Management Group, financial services group Ping An Insurance, and Tus-Holdings, which operates and manages the Tsinghua University Science Park.

The Sino-Singapore (Chongqing) Connectivity Private Equity Fund will invest primarily in Chongqing-based projects in specific industries, focusing on financial services firms developing their Sino-Singapore capabilities, as well as aviation companies exploring travel between Chongqing and Singapore, and other South-East Asian countries.

It will also invest in enterprises tapping Sino-Singapore expertise and experience to enhance the transportation logistics and info-communications infrastructure in Chongqing and other parts of western China.

It is understood that UOBVM is still finalising its investment strategy for the fund.

Seah Kian Wee, managing director of UOBVM (Shanghai) said: “The fund will offer companies an alternative financing option to support their growth and to capture more opportunities as China and Singapore continue to deepen their collaboration in driving the Belt and Road initiative, and in developing the western Chinese provinces and cities.” 

Wee added that many businesses in China are looking to establish a presence in Chongqing because of its connectivity with other Chinese cities. Chongqing posted an 11 percent growth rate in 2015, according to China’s National Bureau of Statistics.

UOBVM’s manages about $450 million across six funds.

Its target sectors are energy, industrials, healthcare, consumer goods and agriculture, investing in up to $25 million per deal. It has invested in subsea and offshore drilling company Mermaid Maritime, education services provide ChinaEdu Corporation and food and beverage company Huong Vuong.

As of June 2015, UOBVM has raised $126.12 million for its ASEAN China Investment Fund III, which has a target of $200 million, according to PEI Research & Analytics. It focuses on investments in the ASEAN-China Growth Corridor, which comprises the 10 member-states of the Association of South-East Asian Nations and mainland China.