Hong Kong-based CLSA Asia-Pacific Markets and state-backed investment firm Shanghai Guosheng Company have joined forces to launch an RMB10 billion ($1.5 billion; €1 billion) fund in Shanghai.
In recent days, The Blackstone Group and First Eastern Investment Group have each separately said they, too, will raise funds in Shanghai, all of which follows the introduction of Shanghai’s onshore fund pilot programme in June.
There are growth opportunities in RMB funds, CG Wu, CLSA chairman of China, said in a statement, citing China’s growing fund market and increasing demand from Chinese companies for consolidation and financing.
CLSA’s alternative asset management arm, CLSA Capital Partners, is not participating in the joint venture as it manages US dollar-denominated funds for international investors across Asia, including China. The RMB fund is a domestic fund for only Chinese investors and will have Chinese general partners. It will not conflict with the investment activities of CLSA Capital Partners, CLSA said in a statement.
Shanghai: International firms look to RMB funds.
CLSA and Guosheng will have equal stakes in the joint venture, which is tentatively named Guosheng CLSA (Shanghai) Industrial Investment Management Company. CLSA declined to disclose its investment in the new fund.
The fund will target the country’s institutional investors and is aiming for a first close by the end of the year. It will focus on investments in companies based in or related to Shanghai, in the renewable energy, green environment, consumer and heavy machinery sectors.
Formed in 2007 after the merger of China’s Shenrong and Dasheng companies, Guosheng is a state-backed investment holding company with RMB10 billion in assets. The company is primarily involved in investment and asset management in sectors such as agricultural products, business estates, construction materials, culture and sports, infrastructure, education and refined chemicals.