Fortune Team’s Share Purchase Of State-Owned Firm Raises Questions On Valuation

Partners at Chinese venture firm Fortune Venture Capital Co. Ltd. received a handsome Christmas gift last month. The move to better incentivize valued talent at the state-backed venture firm, however, raises questions on how such state-affiliated assets are valued.

The firm's parent, state-owned Hunan TV & Broadcast Intermediary Co., Ltd., said in a disclosure filing (in Chinese) last month that the Hunan provincial government had approved a deal to allow partners at Fortune Capital to acquire a 20% stake in one of the firm's subsidiaries, Shenzhen Fortune Caizhi Venture Investment & Management Co., Ltd., for RMB311 million (US$45 million).

The partners, including Fortune co-founders Xiao Bing and Liu Zhou, will acqui...

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