Tianjin government launches $14.5b guidance fund

The Tianjin Tianhe Industry Fund has received initial capital of RMB20 billion from the municipal government, with the rest expected to come from private sources. The capital will be used to seed a series of sub-funds, which will attract additional private sector commitments, with a view to facilitating cumulative investment of RMB500 billion.

The launch follows an announcement by the central government that a new special economic zone would be established in Hebei province, about 100 kilometers south of Beijing. Covering 100 square kilometers – but expected to eventually reach 2,000 sqkm – the Xiongan New Area is supposed to further development of the Beijing-Tianjin-Hebei region. It has been likened to the Shenzhen special economic zone and Shanghai’s Pudong district.

Industrial & Commercial Bank of China, China Construction Bank, Bank of China, Bank of Beijing, CITIC Group, and China Insurance Investment Fund have agreed to provide more than RMB100 billion in financial support to projects supported by the fund, Shanghai Securities News reported. In addition, the fund manager – Haihe Industrial Fund Management – signed investment intention agreements with groups including Hony Capital and Minsheng Investment.

Tianjin Tianhe Industry Fund is the fourth state-sponsored mega fund launched in the past 12 months. The most recent was the Reform Central Enterprise Operation Investment Fund, which is backed by the Guangzhou government and intended to drive state-owned enterprise reform. A first close of RMB50 billion came in March and the full target is RMB150 billion.

Last year, China private equity fundraising reached a record $79.7 billion, with 80% of commitments going into renminbi vehicles. The first two of these mega funds accounted for the bulk of commitments.

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

• Topics
• Greater China
• Fundraising
• Renminbi fund
• China
• Renminbi
• Hony Capital