Goldstone Investment to launch PE fund
CITIC Securities’ direct investment arm, Goldstone Investment, has gained approval from the China Securities Regulatory Commission (CSRC) to set up a private equity fund. It makes CITIC Securities the second brokerage to win approval to raise and manage third-party capital.
Institutional investors will be the targeted to participate as LPs in the fund, while Beijing Jinshi Shangde Equity Investment Management will act as general partner, the brokerage said in a statement filed with the Hong Kong Stock Exchange.
Goldstone Investment was incorporated in October 2007 with RMB5.2 billion ($824 million) of registered capital. Its establishment was a result of a pilot program that awarded licenses to 34 securities companies to allow them to engage in private equity investments.
As it stands, most investments must be made from the brokerages' own capital reserves. However, China International Capital Corporation (CICC) became the first securities company qualified to tap third-party investors to raise a $500 million US dollar-denominated fund through its Hong Kong unit.
Last year, China International Capital Corp also completed its initial close of CICC Jia Tai Private Equity Fund at RMB1.5 billion. The fund is looking for RMB5 billion to tap opportunities related to industry consolidation and M&A. National Council for Social Security Fund and China Development Bank were reportedly the potential investors.
Liu Zhao, executive director of the new renminbi fund, said recently that CICC expects private equity to account for 20%-30% of its total revenue within five years.
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