SHANGHAI Growth Investment is set to become the first Hong Kong-listed China investment fund jointly managed by Chinese and Taiwanese interests. The closed-end fund, focusing on investments in Shanghai, is placing 10 million shares at US$10.40 each for a listing on the stock exchange. The placing is accompanied by the issue of one warrant for every five shares subscribed. The fund's net asset value is estimated at $9.9 per share. Subject to investors' response to the placing which will be completed tomorrow, the investment fund is expected to be worth between $85 million and $100 million. Shanghai Growth Investment will be managed by Shanghai International Asset Management (HK) - a joint venture 40 per cent owned by Shanghai International Trust and Investment Corporation (SITICO) and 60 per cent owned by Taiwan's Kwang Hua Asset Management. Ken Cheung, director of Peregrine Capital, which sponsored the placing, said Hong Kong played a role as a bridge, making possible the investment vehicle spearheaded by Chinese and Taiwanese interests. He said Shanghai Growth Investment could set an example for the establishment of similar investment funds involving interests from both sides of the Taiwan Strait. Andrew Nan, managing director of Shanghai International Asset Management, said Shanghai Growth Investment would focus on the Greater Shanghai region covering Jiangsu and Zhejiang provinces. He expected the fund would benefit from its relationship with SITICO, which is 84.76 per cent owned by the Shanghai municipal government and has equity stakes in more than 120 mainland enterprises and joint ventures. He said the fund had the preferential right to co-invest with SITICO in existing and new projects, which would give it direct access to some of Shanghai's best unlisted enterprises. About 50 per cent of the fund would be invested in industrial projects, 35 per cent in the service sector, including retail, transport and utility businesses, and no more than 15 per cent in real estate, he said. Initially, the fund intends to invest about $18 million in six projects, and to invest the remainder over the next two years. The six projects, all introduced by SITICO, include taking a 28 per cent in Shanghai JAWA Shareholding Co, a 25 per cent stake in Shanghai Wujing Acetic Acid Co and a 25 per cent stake in AEG Subway Vehicle Co. It also plans to take a 34 per cent interest in each of the following: Shanghai Pudong Qinshan Nuclear Power Generating Technology Development Co, Shanghai Pudong Transportation Lifting Company and Shanghai Pudong Waigaoqiao Storage Co. It has been agreed that no more than 25 per cent of the fund's net assets be invested in equity securities in China and Hong Kong.