Infotech National Emerging Industry Investment Guidance Fund, a state government guidance fund initiated by China's Ministry of Finance and the National Development and Reform Commission to spur innovation in the country, has officially launched after completing a first closing of RMB6 billion (US$872 million) .
In 2015, the Chinese government announced plans to establish a National Emerging Industry Investment Guidance Fund to support innovation and push the nation's industries to a more advanced level technologically. The fund was also tasked with helping support China's underdeveloped service trade and optimize the country's future economic growth.
In July 2016, Infotech, a venture firm founded by several former government officials and capitalized by state-owned China Electronics Corporation, won a bid to become one of the managers for the fund, then renamed as Infotech National Emerging Industry Investment Guidance Fund, with a total fundraising target of RMB10 billion (US$1.45 billion).
In a press event held last Friday, Infotech said that the fund has been registered in Shenzhen's Longgang district, and successfully completed first closing of RMB6 billion (US$872 million).
Limited partners in the vehicle include anchor investments from the central government's fiscal budget, as well as state-owned and private companies including Postal Savings Bank of China Co., Ltd., Shenzhen Longgang Financial Investment Holdings Ltd., Anhui Province High-Tech Industry Investment Co., Ltd., Hefei High-Tech Construction Investment Group and Henan State Land Asset Management Co., Ltd., according to an article published by a local newspaper in Shenzhen.
The fund will deploy 80% of the capital in making early and mid-stage investments in new and emerging industries, while 20% will be earmarked for late-stage investment in these industries.
Infotech was established in 2000 with offices in Beijing, Shenzhen and Shanghai. Currently, it has RMB7 billion (US$1 billion) under management. The company has made 47 direct investment in Chinese technology companies including Beijing-based video technology supplier Vimicro, Guanzhou-based currency recognition and cash processing solutions provider GRG Banking, and Gansu-based integrated circuit packaging company Tianshui Huatian Technology Co., Ltd.