China Investment Corporation, Silk Road Fund, Singapore’s Temasek Holdings, ARM Holdings plc and two other investors have established a fund targeted to raise US$800 million to invest in the mobile Internet, Internet-of-Things (IoT) and artificial intelligence sectors globally.
Shenzhen government-owned conglomerate Shum Yip Group Ltd. and Chinese private equity firm Hopu Investment Management Co are also backers of the Shenzhen-based vehicle named Hou An Innovation Fund, according to an announcement posted on China’s Ministry of Science and Technology’s website.
ARM and Hopu will be managing the vehicle, utilizing ARM’s global industrial ecosystem and resources, as well as Hopu’s investment expertise. With US$3 billion assets under management, Hopu was co-founded by Chinese dealmaker Fang Fenglei, a former Goldman Sachs executive.
"Shenzhen will utilize Hou An Innovation Fund to strengthen partnerships with emerging industries and achieve technological upgrade," said Xu Qin, Shenzhen’s mayor, during a launch ceremony yesterday. "The fund combines expertise from the capital markets, technology and industries to help push forward next-generation technology."
Established in 2014, Silk Road Fund was backed by the State Administration of Foreign Exchange, China Investment Corp, Export-Import Bank of China and China Development Bank with US$40 billion to promote trade and economic prosperity and connectivity along the ancient trade route.
China Investment Corp is the country’s sovereign wealth fund with over US$800 billion under management. It and Singapore’s Temasek are providing financial backing to the Hou An Innovation Fund.
Shenzhen’s Shum Yip Group is 100% owned by the Shenzhen government, and serves as an investment holding company with interests in property, infrastructure, logistics, agriculture, technology and financial services. As of June 2016, it had total assets of RMB95.6 billion (US$13.9 billion).