Giving VC biz the Chinese touch

Updated 2017-01-23 09:56:58 China Daily
Executives of Shenzhen Kiazhong Precision Technology Co Ltd ring the opening bell at the Shenzhen Stock Exchange to mark the company's listing on the bourse on Nov 24, 2016. Kiazhong is one of the 112 companies initially backed by State-owned Shenzhen Capital Group that went on to list on various stock markets in China and abroad. (Photo provided to China Daily)

Executives of Shenzhen Kiazhong Precision Technology Co Ltd ring the opening bell at the Shenzhen Stock Exchange to mark the company's listing on the bourse on Nov 24, 2016. Kiazhong is one of the 112 companies initially backed by State-owned Shenzhen Capital Group that went on to list on various stock markets in China and abroad. (Photo provided to China Daily)

Shenzhen Capital Group Co Ltd, a State-owned venture capital firm, will strengthen international cooperation and investments to bring in new technology to emerging industries in China.

Through investments in innovative companies overseas, the firm hopes to take full advantage of its capital resources to speed up upgradation of China's technology and industrial structure, said Ni Zewang, chairman of SCGC.

He said the firm could also help connect the startups it has backed in China with overseas industry resources so that they could mature more rapidly.

Since its founding in 1999 till November-end, SCGC has invested 24.3 billion yuan (.52 billion) in 683 projects in areas like modern service, high-end manufacturing, IT, technology and many other emerging industries.

By the end of November, 112 companies listed on stock exchanges. Of them, 74 were A-share listings. Others listed on overseas bourses, including some in the United States, Australia and Singapore.

Ni said competition among VC firms is intensifying in China. Also, projects securing investments are becoming extremely expensive. On the other hand, some overseas investment opportunities have arisen of late.

China's VC firms such as Huashan Capital One Inc, which invests in firms in financial technolgy, and Legend Star, owned by Lenovo Holdings, have been investing abroad.

In fact, China's VC and PE firms had made 265 investments worth 31.7 billion yuan in the first 11 months of 2016, according to Zero2Ipo Research, a Beijing-based researcher of financial institutions.

Its data shows the number of investments and the money invested rose 105 percent and 189 percent on average year-on-year respectively from 2009 to 2015.

SCGC's investments overseas account for only 6 percent of its total. Its goal is to increase the figure to 15 percent by 2020.

To reach that goal, SCGC will hire professionals, cooperate with well-known investment institutes, and establish cross-border funding, Ni said.

He believes such funding could connect domestic and foreign financial markets, leading to precise allocation of resources.

SCGC's various funds had capital assets worth about 200 billion yuan under management by November. It also has 1.2 billion yuan worth of joint venture funds involving financial institutes in Singapore, South Korea, Japan and Israel.

It is raising another 5 billion yuan for a new joint fund with US institutes, eyeing startups in cutting-edge technology industries, such as 3-D metal printing.

In November, it signed a strategic cooperation agreement with a Russian venture capital firm, a government-initiated fund of funds, in a bid to invest in Chinese startups registered in Russia and Russian startups in China.

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