Sailing supports securities JV in Shanghai Free Trade Zone

Other backers include Hong Kong-listed Freeman Financial Corporation, which said in a regulatory filing that it would commit RMB350 million ($54.9 million) to the new venture and take a 10% stake. Sailing will also hold a 10% interest.

There are 13 other co-promoters, comprising three corporate investors from Hong Kong, nine mainland corporates, and one mainland limited partnership. No single party will own more than 10% of the joint venture and the total financial commitment is RMB3.5 billion.

The securities company is being set up under the Closer Economic Partnership Agreement (CEPA) between Hong Kong and mainland China. It allows Hong Kong-funded financial institutions - that satisfy various requirements - to form fully-licensed joint venture securities companies in China. Hong Kong financial institutions should hold no more than 49% of the total equity between them.

It is one of a number of initiatives intended to encourage innovation and allow financial reforms to be piloted. Other measures include allowing private equity firms to raise renminbi-denominated funds from overseas investors. Domestic GP Hony Capital was among the first batch of companies to be awarded licenses to operate in the Shanghai Free Trade Zone.

The zone, which covers an area of nearly 28.78 square kilometers, claims to offer world-class transportation and communication facilities as well as a tax-free environment. It is also intended to be a testing ground for renminbi convertibility and exchange rate liberalization.

Set up in 2012, Sailing operates the first and largest cross-border, renminbi-denominated private equity fund. The fund was launched with a target of RMB50 billion, to be raised from domestic enterprises. It reached a first close of RMB12 billion.

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• Topics
• Financials
• Expansion
• Greater China
• sailing capital
• Financial Services
• China
• Growth capital