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November 27, 2009

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Home » Business » Finance

Boost for plans to set up VC funds

CHINA'S central government yesterday announced it is to join local governments and private investors in a pilot program to facilitate venture capital funds for innovative and high-technology industries, and industrial restructuring.

The National Development and Reform Commission, the country's top economic planner, and the Ministry of Finance disclosed in a joint statement plans to create venture capital funds in line with the government's call for innovative businesses with growth potential.

Each fund will have a minimum of 250 million yuan (US$37 million), but the statement gave no details on how many funds were expected to be set up.

The two agencies said the funds would be managed by professional institutions, each of which would have at least three experienced venture capital investment managers.

The management teams are also required to have experience in at least three venture capital investments.

The funds would continue as long as they achieve high investment returns and help in industrial upgrading, the statement said.

The central government would have a maximum 20 percent share in each fund and local governments would also contribute no less than the central government while public investors would take at least 60 percent.

Public investment could be from institutional, corporate and foreign investors and management teams.

The central government would not intervene in the operations of the funds, the statement said.


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