Guangzhou sets up new fund of funds to support semiconductor and other key industrial sectors

By Gabby Chen

(JW Insights) Feb 19 -- The Guangzhou municipal government and Guangzhou Industrial Investment and Capital (广州产投) joined hands in setting up two funds - Guangzhou Industrial Investment fund of funds (FoF) and Guangzhou Innovation Investment FoF - in Nansha district of Guangzhou on February 18, reported Securities Times and several other Chinese language presses.

The two funds totaled RMB200 billion ($29.17 billion) with the aim of supporting industrial sectors such as semiconductors, IC, and new energy.

Gao Dongwang, chairman of Guangzhou Industrial Investment and Capital, said, "We will focus on high-quality projects and emphasize the return on investment (ROI) rather than merely being a general partner (GP). And we intend to promote the landing and development of projects in Guangzhou, building a trillion-yuan-level cluster of industrial development funds."

The Guangzhou Industrial Investment FoF, with RMB150 billion ($21.88 billion), will be operated  as a company in the mode of "sub-fund & direct investment". Meanwhile, the Guangzhou Innovation Investment FoF, with RMB50 billion ($7.29 billion ), will take the approach of a limited partnership.

At a fund establishment conference, Guangzhou Industrial Investment and Capital (GIIC) signed cooperation agreements with 11 companies such as CVTE, Farasis Energy, Unicom Medical, and CanSemi, according to the local press reports.