NewMargin Ventures launches $1.5b RMB fund

The GP, which is aiming for a first close of RMB1.3 billion, has already received LP commitments from guidance funds operated by the Shenzhen government and the Nanshan district government, China Everbright Trust, and assorted state-owned and private enterprises.

The vehicle will focus on opportunities in civil-military integration, a state-sponsored initiative that aims to encourage private participation in defense, including the transfer of technologies from state-owned companies to private enterprises. The initiative was first proposed by Mao Zedong in the 1960s, but only became a priority for the Chinese leadership under Xi Jinping, the current president.

While investment in the sector has been growing since 2015, most of the participants are state-owned investment vehicles. NewMargin will concentrate on Shenzhen-based companies that are involved in areas such as military equipment upgrades, new materials, and IT. Semiconductors and industrial robotics are of particular interest.

“The defense sector will suffer fewer headwinds amid a slowing economy. This is apparent from the fact that price-to-earnings ratios for listed defense companies have exceeded those of other sectors for a long time,” said Yuze Han, president and chairman of NewMargin.

Established in 1999, NewMargin has offices in Shanghai, Beijing, Hangzhou, Shenzhen, Xinjiang and Hong Kong. It has RMB35 billion in assets under management. The firm has invested in more than 300 companies, of which 75 have either listed or been exited via trade sales.

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• Topics
• Greater China
• Renminbi fund
• Industrials
• Technology
• Renminbi
• Technology
• Defense & aerospace
• NewMargin Ventures