China-Focused Venture Capital Funds Up Their Investments in Local Tech Firms
Liao Shumin
/SOURCE : Yicai
China-Focused Venture Capital Funds Up Their Investments in Local Tech Firms

(Yicai Global) Sept. 22 -- China-focused venture capital funds are increasing their investments in local tech companies and further opening capital markets in the country. These funds are rising at the fastest pace on record in five years, Sina reported.

Yuan-denominated funds raised USD14.54 billion (CNY95.8 billion) so far this year compared with CNY56.7 billion in the first nine months of last year, Preqin Ltd. data show. The amount of such funds raised was CNY145.8 billion in 2012. This year will likely represent a peak since then.

Some 78 funds plan to raise as much as CNY1.15 trillion over the next few years with support from large state-owned institutions and so-called "state-directed funds," Preqin said. These groups want to promote the development of several domestic industries including advanced engineering, robotics, biotechnology and clean energy innovation.

The money includes CNY350 billion in the China structural reform fund, CNY200 billion in state-owned capital venture funds and CNY150 billion in national enterprise innovation funds.

Such government-backed funds have a larger fundraising target that may take a while to reach. Founded in 2016, the China structural reform fund has raised 20 percent of its registered capital so far. Its fundraising will be complete by the end of next year, the fund's manager said.

"We are at the highest level of fundraising, when local, provincial and national government sponsored organizations are investing in incubators and venture capital funds," said China First Capital Group Ltd. [HK:1269] Chief Executive Peter Fuhrman. "Chinese government agencies are well-funded and want to promote innovation and entrepreneurship. They're doing it right now."

 

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Keywords: Venture Capital