China and Belgium have agreed to raise US$439 million in capital for a second joint private equity fund that will focus on investing in small Chinese companies, Reuters reported. The renminbi-denominated fund will be named China-Belgium Direct Equity Investment Fund II, following a similar fund launched in 2005 that is now fully invested. The first fund was set up by Haitong Securities and Fortis in 2005, and has subsequently invested in about 20 Chinese small- and medium-sized enterprises. Four of these firms have gone public and seven more are ready to list, according to sources cited by Reuters. The first fund’s institutional investors included the Belgian government, Fortis, China’s Ministry of Finance, China Development Bank, and several private Chinese enterprises. The second fund will seek to raise three times more capital than the first venture. It will be run by Haitong-Fortis Private Equity Fund Management. Fortis was broken up in October after succumbing to the global economic crisis, so it is unclear whether it will contribute to the new fund.
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