China sets up mega $5b fund-of-funds to back SMEs

Temple Street night market, Hong Kong, China. Photo: Monica Dorame/unsplash

The Chinese government has launched a $5-billion fund-of-funds to support small and medium enterprises in the country’s first such vehicle to be set up outside Beijing.

China’s finance ministry has teamed up with the ministry of industry and information technology to launch the joint venture company, National Small Medium Enterprises Development Fund Co., Ltd.

The joint fund was set up in Shanghai with a registered capital of 35.7 billion yuan ($5 billion) on June 22, according to an announcement. 

The finance ministry has poured as much as 15.25 billion yuan ($2.2 billion) in the JV holding 42.66 per cent stake, while the remaining corpus will be contributed by 14 investors including China Tobacco, China Life Insurance, The People’s Insurance Company (Group) of China, Minsheng Roal Asset Management, Guosheng Group, Shanghai ICY Capital, China Industry and Information Technology Publishing & Media Group, among others. 

The size of the vehicle is expected to grow to 100 billion yuan ($14 billion) once it rolls out a slew of sub-funds and forges partnerships with local SME funds.

China initially set up the National SME Development Fund sized at 60 billion yuan ($9.4 billion) in September 2015. The finance ministry had infused a total of 15 billion yuan ($2 billion) in the vehicle. The fund has five directors on its board representing the ministries of finance, industry and IT, science and technology, the National Development and Reform Commission, and State Administration for Industry and Commerce. 

The development fund has formed four sub-funds in the past four years involving fund managers namely, Addor Capital, Oriental Fortune Capital, Shenzhen Guozhong Venture Capital Management, and THG Ventures. 

The development fund has invested in about 100 emerging startups such as internet taxation service platform Huisuanzhang, EV-based lithium battery solution developer Hyper Strong, business data solution startup Tianyancha and e-signature software-as-a-service (SaaS) provider Esign.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.