China Merchants Capital co-launches $225m PE fund for growth-stage deals

China Merchants Capital, an associated asset management firm between Chinese state-owned China Merchants Group and Singapore-based GLP, has co-launched a private equity fund with a corpus of 1.8 billion yuan ($255 million) to invest in growth-stage startups in China.

The new fund will primarily invest in startups at Series B round and after with a focus on information technology businesses in the Greater Bay Area, an area of some 71 million population around southern China’s Pearl River Delta, said China Merchants Capital in a WeChat post on Thursday.

The fund will help implement the Greater Bay Area’s strategy to “advance the regional development with technological innovation,” said the company. It will strengthen cooperation among companies in the fields of IT technological advancement and resource integration, providing an additional fundraising channel for China’s new-generation technology firms.

The Greater Bay Area is a Chinese government’s scheme to link and transfer Hong Kong, Macau, and another nine cities in Guangdong Province into the country’s future economic and technological innovation powerhouse. The framework of the scheme was signed in July 2017.

According to a regulatory disclosure with the Shenzhen Stock Exchange (SZSE) on April 30, BOC Financial Asset Investment, an investment unit of Bank of China (BOC), will inject 999 million yuan ($141 million) into the fund, while China Merchants Capital plans to invest 342 million yuan ($48 million).

China Merchants Shekou Industrial Zone Holdings, a Shenzhen-based affiliate of China Merchants Group, subscribed for 450 million yuan ($63 million) through a wholly-owned subsidiary.

The fund will be managed by an affiliate of China Merchants Capital. China Merchants Capital registered about 300 billion yuan ($42 billion) in total assets under management (AUM) as of the end of 2019, shows the company website.

The fund is joining a flood of Chinese state-backed investment vehicles to spice up the technology scene in the southern China’s economic and technology hub much-highlighted by Beijing.

In late March, Chinese state-owned conglomerate Yuexiu Group, and the People’s Insurance Company of China (PICC), which is controlled by the central government, set up their first in a series of industry investment funds that could amount to a combined capital pool of 10 billion yuan ($1.41 billion) for investments in the Greater Bay Area.

Hong Kong-based financial services group China Everbright Limited also joined hands with an array of financial companies in mid-March to launch a new FOF for investments in the region. The fund, which reached the first closing at 1 billion yuan ($143 million), focuses on the next-generation IT, healthcare, consumption, media and entertainment, and advanced manufacturing sectors.

CICC Capital, the investment unit of China International Capital Corporation Limited, teamed up with state-owned China Taiping Insurance Group this January to launch a $1 billion fund for the Greater Bay Area earlier this year.

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.