Cheng Yu-tung-Controlled Chow Tai Fook Plans RQFLP Fund

Credit China, Chow Tai Fook Nominee Limited, and VMS Investment Group Limited have entered into a non-binding agreement to cooperate in a joint-venture investment fund.

The fund, called Chongqing Run Ke Equity Investment Fund Partnership, is a private, closed-ended RMB qualified foreign limited partnership (RQFLP).

Chongqing rolled out a trial RQFLP program in April, which allows offshore renminbi denominated funds to invest in private equity in China.

The joint-venture fund will invest in collateral-backed lending transactions and special situation opportunities in mainland China with an maximum fund size of 1 billion Yuan for a term of 5 years.

The lending transactions will be secured by collateral with sufficient value mainly in real estate properties.

Chow Tai Fook will have 98% of interest in the fund. Credit China and VMS Investment will collectively contribute 2% to the fund. The two firms will split the 2% interest stake, with Credit China and VMS each contributing 51% and 49%.

Chow Tai Fook Nominee Limited is an investment holding firm controlled by Hong Kong tycoon Cheng Yu-tung.

Credit China is a short-term financing service provider in Shanghai for small and medium enterprises and individuals.

VMS Investment is a Hong Kong-based private equity firm founded in 2006.