China: Tianjin City launches government guidance fund with $14.5b target

Twilight over Tianjin.

China’s Tianjin city has established a government guidance fund – the Tianjin Haihe Industry Fund – with a target of raising RMB100 billion ($14.5 billion).

Located 137 kilometres south-east of the capital city Beijing, the fund is intended to grow advanced industries that include high-end manufacturing and aerospace.

Limited partners (LPs) in the fund to date include firms such as CITIC Trust, China Minsheng Investment Group, Tsinghua Unigroup, Haier Group, China Oceanwide Holdings Group. Two Chinese private equity (PE) firms, Hony Capital and ChinaEquity Group (CEG), are also LPs of the fund.

China Construction Bank, Bank of China, Industrial and Commercial Bank of China have also agreed to provide up to RMB100 billion ($14.5 billion) in capital support, though whether this comes in the form of loans, bonds or venture debt is unclear.

Seeded with RMB20 billion ($2.9 billion) from the city budget, it aims to raise an addition RMB100 billion ($14.5 billion) in private capital that will be deployed in various subsidiary funds targeting an array of sectors. The fund will prioritise projects and companies based in Tianjin, though it will also explore opportunities outside the city.

These sub-funds, which will also raise additional private capital, has the aim of deploying up to RMB500 billion ($72.5 billion).

Industries that fund is targeting includes high-end manufacturing, information technology (IT), aerospace, new energy, new energy automobile, new materials, biopharmaceuticals and Internet-related services.

It will have a special focus on marine engineering equipment, special high-voltage power transmission, high-end CNC machine tools, robots, integrated circuitry, and high-performance servers.

In 2016, China saw the emergence of 901 government guidance funds with aggregate fundraising targets of RMB2.4 trillion ($348.1 billion), which is greater than the combined sum of such funds formed from 2013 to 2015.

Local governments in China have used government guidance funds as an alternative form of financing after Beijing imposed restrictions on local government debt as China grapples with its credit bubble and attempts to restrict capital outflows.

Earlier this year, the Infotech National Emerging Industry Investment Guidance Fund was launched to support emerging industries, while the Suzhou Hongtu Big Data Venture Capital Fund was launched to support the Big Data sector.

In a statement to Chinese media, Wang Jinhong, chairman of the fund manager of Tianjin Haihe Industry Fund, highlighted: “The most important point about government guidance funds is that its pursuit must be integrated with those of the market. Some government guidance funds that cannot deploy their capital because their pursuits do not meet those of the market. My biggest ambition is to realise government targets via market operations.”

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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.