China’s state-owned national manufacturing fund and venture capital firm Shenzhen Capital have teamed up to launch a new materials fund with a corpus of 27.5 billion yuan ($4 billion), the VC firm announced on WeChat on September 11.
Besides Shenzhen Capital and the 147.2 billion yuan ($22 billion) national manufacturing fund, its limited partners include Shenzhen Municipal Government Investment Fund, new economy-focused Kunpeng Capital and Shenzhen’s Luohu district investment fund.
The national manufacturing fund will invest as much as 22.5 billion yuan ($3.3 billion) in the fund. Shenzhen Capital’s fully-owned subsidiary Shenzhen Hongtu Investment Management will serve as its fund manager.
Going forward, the fund will primarily invest in the new materials field, especially in inorganic non-metallic materials and other novel segments across the country.
Shenzhen Capital Group, which was co-founded by the Shenzhen Municipal Government and a group of investors in 1999, invests in high-tech companies in areas such as information technology, internet, new media, healthcare, new energy, new materials and advanced manufacturing. Its assets under management stand at 390.8 billion yuan ($57 billion).
As of June 2020, the group has invested in 102 new materials companies. Its portfolio includes titanium material manufacturer Western Superconducting Technologies, non-ferrous metal provider Western Metal Material, LIB cathode material and equipment supplier Beijing Easpring Material Technology, aluminium alloy material player Harbin ZhongFei New Technology, SZ-listed Dinglong Holdings and Jiuri New Materials.
China set up the national manufacturing fund in 2019 to invest in companies working on areas including new materials, next-generation information technology and electrical equipment. These three areas are among the 10 sectors that China has prioritised in its Made in China 2025 plan to dominate globally in technology.
