Shanghai’s Huangpu district plans to launch investment fund to support local tech firms
- The yuan-denominated fund will be set up and operated by an investment organisation affiliated with the Huangpu government, an official said
- Huangpu authorities have shortlisted 187 fintech, AI and biotech firms that they believe have high growth potential
The fund, to be set up and run by an investment organisation affiliated with the local government, will become operational in the next 12 months, according to Xu Weipeng, a senior official with Huangpu Science and Technology Commission.
“Huangpu [district] has an edge in the finance sector, which can be tapped to spur promising technology companies,” Xu told the Post on Thursday. “The fund will be operated [in line] with international practices.”
The yuan-denominated fund will be backed by a select number of partners on the mainland.
Huangpu, located on the west bank of its namesake river, is home to a clutch of financial institutions including China Pacific Insurance and Haitong Securities.
Xu said that Huangpu authorities have shortlisted 187 fintech, AI and biotech firms that they believe have high growth potential and will offer them support to expand.
The fund’s investment will go beyond the list because Huangpu district hopes to discover future stars amid the country’s deepening efforts to digitalise the economy, he added.
“Governments of different levels in China will mobilise more resources to support the country’s technology firms now that the US is restricting investments in Chinese businesses,” said Wang Feng, chairman of Shanghai-based financial services group Ye Lang Capital. “Huangpu district, as one of the most affluent regions in Shanghai and the mainland, must aim high in attracting more investments.”
Hu Junqing, founder and chairman of Shanghai Information2 Software, which raised 570 million yuan (US$78.6 million) in an initial public offering (IPO) on Shanghai’s Star Market in January, said local government support played an important role in the company’s growth.
“The incentives offered by the Huangpu government not only gave us much-needed financial aid, but also bolstered our confidence, encouraging us to keep up our enterprising spirit,” he said.
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Yang Hongwei, president of SMO ClinPlus, which engages in clinical studies and offers site management organisation services for pharmaceutical firms, said the company had fully taken advantage of Huangpu’s geographic location to build its business.
It raised 700 million yuan from its IPO in Shenzhen in May last year.
Under the new system, listing requirements, such as track records for revenue and profit, have been eased to pave the way for companies from fledgling industries to go public, hence benefitting private equity and venture capital funds’ pursuit of investment returns.
