Guangzhou Industrial Investment Fund Management Company, China Reform Holdings Co., Ltd and Shanghai Pudong Development Bank Co. Ltd. have jointly established a RMB150 billion (US$21 billion) investment fund geared to invest and support reforms of state-owned enterprises, according to an announcement.
The first phase of the vehicle, named China Reform SOE Operating Investment Fund, will obtain capital allocations of RMB50 billion (US$7 billion) from the three state-owned entities.
Pudong Development Bank will contribute RMB30 billion (US$4 billion), while China Reform, an entity established by the State Council in 2012 tasked to manage bad assets from state-owned enterprises and restructure failing state-owned corporations, will contribute RMB10 billion (US$1.4 billion).
Guangzhou Industrial Investment Fund, a government guidance vehicle set up by the Guangzhou government to support industry upgrade in the city, will also contribute RMB10 billion (US$1.4 billion).
The newly established fund will seek to complete investments in three to five years. It aims to support the development of state-own enterprises and improve their operation efficiency by consolidation, securitization, deepening reforms and leveraging the capital markets.
China Reform has RMB150 billion (US$21 billion) in assets as of the end of 2015. It previously established a venture capital fund in Shenzhen’s Qianhai special economic zone with registered capital of RMB100 billion (US$15 billion) to support technology innovation at state-owned enterprises, especially those owned by the the central government.