Jiatong launches $140m fund for hi-tech start-ups
Shanghai's Jiatong University, one of the city's top academic and research centres, has joined forces with the local government to set up a 150 million yuan (about HK$140.5 million) venture capital fund to take high-technology companies public.
The move highlights a trend among top mainland universities to enter the venture capital business in a bid to incubate information technology (IT) start-ups.
Jiatong University's move follows that of its cross-town academic rival, Shanghai Fudan University, which said last Friday it had partnered Shanghai Industrial and Shanghai A-share technology company Forward to set up a venture capital fund of up to 400 million yuan.
Wang Shenghong, president of Fudan University, said venture capital funds by top universities echoed mainland government policy and would help transform their academic results into commercial products.
Shanghai JTU Venture Capital, formed with an eye on a successful Growth Enterprise Market (GEM) listing last week by a Fudan University-invested company, aims to invest in pharmaceuticals, biotechnology and information technology.
'We are looking at the Growth Enterprise Market in Hong Kong,' said Chen Sigen, JTU Venture Capital president. 'We are hoping to do the same as Fudan University.'
Shanghai Fudan Microelectronics, which provides integrated circuit design and system integration services, made a strong GEM debut last Friday.
Its shares rose to HK$1.92 compared with their offer price of 80 HK cents. Mr Wang said it was an important step for university-backed enterprises to gain experience of capital market operations by seeking a GEM listing.
Beijing Beida Jade Bird Universal Sci-Tech, a Peking University-backed company, has also listed its shares on the GEM.
Shanghai JTU is also looking toward the mainland's proposed second board, which might be ready next year and would be aimed at listing high-growth and high-technology stocks.
One plan under review would merge the existing Shanghai and Shenzhen stock exchanges with Shanghai becoming the main board. A new growth market would be set up in Shenzhen.
The plan, however, affects local tax revenues and may require lengthy negotiations.
JTU Venture Capital links Jiatong University with Shanghai Venture Capital, the main venture capital arm of the city government, as well as the Xuhui district government, where the university's main campus is located. Each partner has contributed one-third of the fund's capital.
Jiatong University is particularly strong in science and technology.
Key multinationals have long been tapping its talent pool for their own research and production goals.
Mr Chen said the venture capital company would have a management team of about 10.
