Chinese State-Owned NewMargin Ventures Reaches First Close For New Fund At $187M

NewMargin Ventures, a Chinese state-owned private equity and venture capital firm, announced on Tuesday that it has launched a new fund to raise a total of RMB10 billion (US$1.49 billion) in southwestern Shenzhen’s Nanshan district, an innovation hub that hosts Chinese tech heavyweights like Tencent and Huawei.

The new fund, debuted on Monday, already reached the first closing at RMB1.25 billion (US$187.11 million), said NewMargin Ventures in a statement released on its website on Tuesday. Chinese state-owned conglomerate China Everbright Trust and two local government-guided funds were among its limited partners.

NewMargin Ventures said the fund will specialize in three domains, namely civil-military integration, high-margin manufacturing, and state-owned enterprises under the mixed ownership reform. Specifically speaking, the fund will seek investment opportunities in fields like information technology, new material, as well as the production of high-end chips, industrial robots, and automatic equipment.

"The civil-military integration field has entered a period filled with strategic opportunities since it became a national strategy and a priority on the Chinese leadership’s agenda in March 2015," said NewMargin Ventures in the statement. Such integration refers to the military and defense industries transferring technologies to civilian sectors and including private companies on the military’s suppliers list. So far, Chinese state-owned defense contractors still dominate the research, development, and production of the country’s weapons and equipment.

Founded in July 1999, NewMargin Ventures said it offers a combination of "strong local and national government support within an organizational culture defined by independent decision-making, professionalism, and teamwork." The company, with over US$35 billion under management, specializes in early stage, growth capital, mergers and acquisitions investments. The company said it has backed 300 enterprises, among which are 75 listed or acquired companies.

NewMargin Ventures said its domestic investors include government-backed Shanghai Alliance Investment Co. and China Foundation of Science & Technology for Development, a joint venture of the National Development and Reform Commission, Ministry of Commerce, and Chinese Academy of Sciences. It counts Singapore’s sovereign wealth fund GIC, public food firm Kerry Group, and American telecom firm Motorola among its foreign investors.

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