CDB to set up China's first private equity fund of funds

China Development Bank will launch the country’s first private equity fund of funds, the Financial Times reported. A subsidiary of the bank, CDB Capital, has received approval from the State Council to raise US$9 billion for the fund of funds, which will have a 12-year lifespan. Suzhou Industrial Park, originally a joint venture between Singapore and the city of Suzhou, will assist CDB Capital on the project. Executives said the fund is already near its first closing of US$2.3 billion, with CDB Capital and Suzhou Industrial Park contributing US$750 million and US$450 million, respectively. All the initial investors will be domestic institutions, including the state pension fund and large insurers. CDB Capital is also interested in attracting international investors. There are as many as 400 domestic private equity firms in China. An estimated US$50 billion has been raised by foreign and local funds for investments in China, with US$15 billion of that coming in the first nine months of 2010.