IN a pioneering move for a mainland government investment body, the Guangdong Development Fund is looking to London to raise US$100 million in investment capital. The money will be raised through the issue of 100 million shares in a closed-end fund to be listed on the London exchange, an unprecedented move by a mainland provincial-government backed company. The closed-end fund will be the first investment fund arranged by the Hong Kong commercial arm of the Guangdong government, Guangdong Investment Co. Last month the company raised US$250 million in the US debt market through the issuance of senior notes. Company chairman He Keqin said yesterday: ''The direct investment fund has the full support of the Guangdong provincial government and will invest in quality projects in the province.'' The fund will be launched through a placing and subscription, conditional upon listing being granted by the London exchange. Guangdong Enterprises, through wholly owned subsidiary Guangdong Capital Holdings, will subscribe for 10 million of the 100 million shares to be issued at $1 each. Another 81 million shares will be placed by lead manager Barclays de Zoete Wedd Securities, of which BZW itself will take up 10 million shares. Barclays de Zoete Wedd (Asia) managing director Huw Jenkins said a facility existed to find subscribers for the remaining nine million shares. One warrant will be issued for every five shares. Conversion can take place within five years from next Wednesday, when shares and warrants are listed on the London exchange. The fund's investment manager is Guangdong Investment Management, 55 per cent owned by Guangdong Capital Holdings and 45 per cent by First Eastern China Investment - the latter a consultancy for direct investment in China. First Eastern's founder Victor Chu Lap-lik said the fund would maintain a diversified portfolio of direct investments mainly in Guangdong province. The fund will focus on industrial, manufacturing and infrastructure projects as well as service industries. ''The fund may invest no more than 10 per cent of its total assets in China concept shares such as Hong Kong-listed H shares and mainland-listed B shares,'' Mr Chu said. It is also limited to investing no more than 20 per cent of its assets in any one project and will take only minority interests in investments. To date, five investments had been identified as possible targets, with non-binding letters of intent being signed. The targets are Foshan Transformer Works, Foshan Tongbao Co, Xinhui New Building Material (Enterprise) Co, Panyu Bridge and Ningbo Malting Plant. It is intended that US$3.4 million will be put into Foshan Transformer; US$3.2 million in Foshan Tongbao; US$4.7 million in Xinhuai New Building; US$9.2 million in Panyu Bridge; and US$6 million in Ningbo Malting Plant.