China launches first car-focused private equity fund
China’s first auto sector-focused private equity fund is looking to raise RMB30 billion ($4.6 billion) and hopes to close its first deals in August, the Financial Times reported.
The Shanghai Automotive Industry Fund is a joint venture between the China Machinery Industry Federation and the government of the city's Jiading district. It is looking beyond car production to auto-related services such as rental, logistics and exhibitions.
The fund is intended to leverage the massive growth in car ownership in China. Vehicle output surpassed 18 million units last year - taking the country past the US to become the world's largest auto market - and analysts expect production to reach 35 million units per year over the next decade.
How How Zhang, head of research at Shanghai-based Z-Ben Advisors, added that the fund also reflects a nascent but growing diversity within China's private equity industry. "You have private equity funds in China focusing on services in the agricultural sector, for instance, as well as other industries but it's all still very much in its infancy," Zhang said.
Earlier this month, CMIA launched a $200 million China fund that will largely target agriculture.
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