China Everbright to receive investment mandate from NSSF

The agreement, which is yet to be finalized, would see NSSF allocate "tens of billions of renminbi" to CEL through a separately managed account, said James Pan, a member of CEL's management committee. This would be channeled into 10-13 funds on CEL platform, including large joint venture vehicles such as Everbright-IDG Industrial Fund and Everbright-Focus Media's New Industry Investment Fund, as well as smaller sector-focused funds managed by CEL.

"We have a good reputation in the industry in terms of building a cross-border asset management platform. This time we're helping NSSF build an investment portfolio; we decide which funds on our platform to invest in," Pan told in an investor conference in Qingdao. "NSSF has recognized our multi-fund investment strategy. We hope to reach an agreement once they have completed due diligence on each of our funds."

As of June, CEL managed 33 private equity, venture capital and public equity investment funds covering generalist, sector, mezzanine, and fund-of-funds strategies, with total asset under management of HK$67.8 billion ($8.7 billion). CEL launched its own renminbi fund-of-funds, targeting RMB10 billion. The fund has already made commitments to Sequoia Capital's latest China fund and CITIC Capital's new Japan-focused vehicle.

The NSSF, set up in 2000 and managed by the National Social Security Council, has been making allocations to domestic PE and VC funds for more than a decade and is recognized as a significant LP. It made its first commitment to a domestic manager in 2004; four years later, it won regulatory approval to deploy up to 10% of its total assets in domestic private equity funds. Portfolio GPs include CDH Investments and Hony Capital.

IDG Capital Partners and SAIF Partners were among the second batch of seven PE managers in China to receive allocations from NSSF in 2010. The pension fund invested RMB1.2 billion in IDG's RMB3.6 billion fund, alongside the Chinese Academy of Sciences Holdings and China Development Bank Capital.

"We felt great responsibility to manage that fund as we had NSSF as our LP. We were very clear that we only invested in projects we were familiar with. We didn't take too much risk or deploy capital too quickly," Hugo Shong, founding general partner of IDG, said in the same event. "Most of the capital from that fund was invested in PE projects, with a certain amount of capital going towards early-stage start-ups, such as Baofeng Technology."

The NSSF started making direct investment in technology companies last year, taking a 5% stake in Alibaba Group's internet finance affiliate Ant Financial Services. The fund generated an investment return of 15.19% last year, up from 11.69% in 2014.

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• Topics
• Greater China
• Fundraising
• Renminbi fund
• China
• China Everbright
• LPs
• NSSF