Belgian, Chinese sovereign funds to launch joint vehicle

The China-Belgium Mirror Fund will take minority stakes alongside Chinese firms in mid-sized European companies with strong potential in China. It is the first mirror fund that China has set up in the eurozone.

"The Belgian government hoped the country could become a gateway to Europe for China," said Belgian Deputy Prime Minister and Foreign Minister Didier Reynders.

The first round of fundraising closed in Brussels on Wednesday in a ceremony attended by CIC Chairman Lou Jiwei, Belgian Prime Minister Elio di Rupo, and China's vice-premier, Li Keqiang, who said Belgium will become a very important platform for Chinese companies to expand in other member countries of the European Union.

A Capital will manage the fund, which will initially invest up to EUR50 million ($65.7 million) in European companies that focus on automotive, environmental or consumer-branded goods that are under-developed in China, alongside Chinese players. The target size of the fund is set to be EUR250 million, but may reach EUR500 million over time, with family offices and other potential investors coming in.

"CIC wants to make clear that they are commercially driven," said Andre Loesekrug-Petri, chairman of A Capital. "They don't want to be seen as political."

A Capital has already launched a Euro fund dedicated to China-EU cross-border investments, and the firm's PIPE co-investment with PRC conglomerate Fosun in Club Méditerranée (Club Med) in last June is said to act as a model for future investments from the outbound fund.

At the same time, CIC has been increasingly active in outbound investments. The sovereign fund has reportedly teamed up with Blackrock to launch a multi-billion dollar investment fund. It will mainly focus on investing in companies outside China that offer technologies or resources the country needs, leveraging on BlackRock's strengths and familiarity with global markets.

Earlier this week, CIC also confirmed plans for a joint $4 billion investment fund with the Russian Direct Investment Fund (RDIF). Each party will put in $1 billion, with the remaining $2 billion is expected to be generated from Chinese institutional investors. The new vehicle is earmarked for launch by the end of June 2012.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Europe
• Fundraising
• China
• Europe
• A Capital Asia
• Outbound investment
• CIC
• BlackRock
• Sovereign wealth fund